VI. Article 6

A. Text of Article 6

Article 6: Establishment of Panels

1. If the complaining party so requests, a panel shall be established at the latest at the DSB meeting following that at which the request first appears as an item on the DSB’s agenda, unless at that meeting the DSB decides by consensus not to establish a panel.(5)

(footnote original)(5) If the complaining party so requests, a meeting of the DSB shall be convened for this purpose within 15 days of the request, provided that at least 10 days’ advance notice of the meeting is given.

2. The request for the establishment of a panel shall be made in writing. It shall indicate whether consultations were held, identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to
present the problem clearly. In case the applicant requests the establishment of a panel with other than standard terms of reference, the written request shall include the proposed text of special terms of reference.

B. Interpretation and Application of Article 6

1. Article 6.1

(a) Multiple panels

(i) Two panels established, same parties and same claims

182. In Australia — Automotive Leather I and II, pursuant to requests made by the United States, two panels were established regarding the same matter. In the later request for the establishment of a panel, the United States asked that its earlier request be withdrawn. Australia argued that the United States did not have the right to have a second panel established, and requested that the panel terminate its work immediately. The Panel denied Australia’s request:

“The establishment of a panel is the task of the DSB. It is by no means clear that, once the DSB has established a panel, as it did in this case at its meeting of 22 June 1998, the panel so established has the authority to rule on the propriety of its own establishment. Nothing in our terms of reference expressly authorizes us to consider whether the DSB acted correctly in establishing this Panel.

…

In our view, Australia is asking this Panel to read into the DSU an implicit prohibition on multiple panels between the same parties regarding the same matter that does not exist in the text of the DSU. Australia’s arguments in support of its position arise out of policy considerations and address the object and purpose of the DSU. In light of the fundamental importance in the WTO dispute settlement system of the right to have a panel established to examine a matter, in the absence of a consensus not to do so, we do not consider it appropriate in this dispute to read such an implicit prohibition into the DSU. This is particularly true given that the policy concerns expressed by Australia are purely theoretical and do
not arise in this case. Specifically, this is not a case where a complainant is actively pursuing two proceedings with respect to the same matter — the United States has made it very clear that it is not pursuing the first dispute. To the contrary, the United States has sought to terminate the first dispute, and it is Australia which has sought to prevent that result. Nor is this a case where a complainant has sought a second panel before a first panel has completed its work with respect to the same matter because it was dissatisfied with developments in the first panel. Although the first panel in this case was established, it was never composed and thus never began its work.

For the foregoing reasons, we deny Australia’s request to terminate this Panel, and will continue our work in accordance with our terms of reference.”(223)

(ii) Same panel members, different parties and a measure in common

183. On 21 November 2006, a month after the establishment of the panel in US — Shrimp (Thailand), the DSB established a separate panel in US — Customs Bond Directive. The terms of reference of both panels included the application of the Enhanced Bond Requirements by the United States to imports of shrimp.(224) At that meeting of the DSB, Thailand stated that it had expected the establishment of a single panel for both proceedings in accordance with Article 9.1 of the DSU. In the absence of that single panel, Thailand indicated that, pursuant to Article 9.3 of the DSU, it expected that the same persons would be appointed as panelists in the two disputes and that the timetables would be harmonised. The representative of the United States responded that, although the panel in US — Shrimp (Thailand) had already been established, the same persons could be appointed to serve as panelists in the two proceedings and the timetables of the separate panels could be harmonised. The meetings to appoint the same members for both panels were held jointly between the two separate complainants, Thailand and India, and the common respondent, the United States. Since the parties were unable to agree on panelists to serve for these proceedings, on 19 January 2007, Thailand and India, requested in separate letters, that the Director-General determine the composition of the panel pursuant to Article 8.7 of the DSU, and select the same persons to serve as panelists for both proceedings, pursuant to Article 9.3 of the DSU. On 26 January 2007, the DG composed the two separate panels consisting of the same members.(225)

2. Article 6.2

(a) Task of panels to examine requests for establishment

184. In EC — Bananas III, the Appellate Body “recognize[d] that a panel request will usually be approved automatically at the DSB meeting following the meeting at which the request first appears on the DSB’s agenda.”(226) Thus, the Appellate Body concluded that “[a]s a panel request is normally not subjected to detailed scrutiny by the DSB, it is incumbent upon a panel to examine the request for the establishment of the panel very carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU”.(227)

185. In rejecting the Panel’s standard of review in the interpretation of the text of the panel request, the Appellate Body, in EC — Selected Customs Matters noted the danger of a panel interpreting the term “measure at issue” in light of the substance of the specific WTO obligation allegedly being violated:

“Interpreting the term ‘measure at issue’ in Article 6.2 of the DSU in the light of the substance of the specific WTO obligation that is allegedly being violated(228) would generate uncertainty and complexity in WTO dispute settlement proceedings. When drafting a request for the establishment of a panel, the complainant would have to foresee the possible restrictions that the substance of the legal provisions might impose on the type of measure that could be challenged. The identification of the measures at issue in the panel request might prove to be even more complex where the challenge concerns a plurality of provisions of the covered agreements. Moreover, the existence, nature, and scope of possible restrictions would depend on the panel’s interpretation of the substance of those legal provisions. The respondent might also be placed in an uncertain situation in presenting its defence because it would have to guess what the panel would identify as the measure at issue on the basis of the panel’s interpretation of the substance of the alleged violation. This could lead to unnecessary litigation on a panel’s terms of reference, as the responding party may choose to contend at a preliminary stage that, in the light of the substance of the legal provision on which a specific claim is based, the measure identified in the panel request does not fall within the panel’s terms of reference.”(229)

(b) Request must be sufficiently precise

186. In EC — Bananas III, the Appellate Body held that there were two reasons why a panel request must be “sufficiently precise”:

“As a panel request is normally not subjected to detailed scrutiny by the DSB, it is incumbent upon a panel to examine the request for the establishment of the panel very carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU. It is important that a panel request be sufficiently precise for two reasons: first, it often forms the basis for the terms of reference of the panel pursuant to Article 7 of the DSU; and, second, it informs the defending party and the third parties of the legal basis of the complaint.”(230)

187. In US — Carbon Steel, the Appellate Body reiterated that the underlying requirements of Article 6.2 are first, to define the scope of a dispute, and second, to “serve the due process objective of notifying the parties and third parties of the nature of a complainant’s case.”(231)

“The requirements of precision in the request for the establishment of a panel flow from the two essential purposes of the terms of reference. First, the terms of reference define the scope of the dispute. Secondly, the terms of reference, and the request for the establishment of a panel on which they are based, serve the due process objective of notifying the parties and third parties of the nature of a complainant’s case.(232) When faced with an issue relating to the scope of its terms of reference, a panel must scrutinize carefully the request for establishment of a panel ‘to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU.’(233)

As we have said previously, compliance with the requirements of Article 6.2 must be demonstrated on the face of the request for the establishment of a panel. Defects in the request for the establishment of a panel cannot be ‘cured’ in the subsequent submission of the parties during the panel proceedings. Nevertheless in considering the sufficiency of a panel request, submissions and statements made during the course of the panel proceedings, in particular the first written submission of the complaining party may be consulted in order to confirm the meaning of the words used in the panel request and as part of the assessment of whether the ability of the respondent to defend itself was prejudiced.(234) Moreover, compliance with the requirements of Article 6.2 must be determined on the merits of each case having considered the panel request as a whole, and in light of the attendant circumstances.”(235),(236)

188. In US — Continued Zeroing, the Appellate Body explained that the identification of the specific measures at issue, pursuant to Article 6.2, is different from a demonstration of the existence of such measures:

“[T]he specificity requirement under Article 6.2 is intended to ensure the sufficiency of a panel request in ‘present[ing] the problem clearly’. The identification of the measure, together with a brief summary of the legal basis of the complaint, serves to demarcate the scope of a panel’s jurisdiction and allows parties to engage in the subsequent panel proceedings. Thus, the specificity requirement means that the measures at issue must be identified with sufficient precision so that what is referred to adjudication by a panel may be discerned from the panel request. The Panel, however, appeared to attribute a more substantive meaning to the specificity requirement, whereby the existence and precise content of a measure must be demonstrated for a panel request to fulfil this requirement.

Yet, the identification of the specific measures at issue, pursuant to Article 6.2, is different from a demonstration of the existence of such measures. For the latter, a complainant would be expected to present relevant arguments and evidence during the panel proceedings showing the existence of the measures, for example, in the case of challenges brought against unwritten norms.(237) Moreover, although a measure cannot be identified without some indication of its contents, the identification of a measure within the meaning of Article 6.2 need be framed only with sufficient particularity so as to indicate the nature of the measure and the gist of what is at issue. Thus, an examination regarding the specificity of a panel request does not entail substantive consideration as to what types of measures are susceptible to challenge in WTO dispute settlement. Such consideration may have to be explored by a panel and the parties during the panel proceedings, but is not prerequisite for the establishment of a panel. To impose such prerequisite would be inconsistent with the function of a panel request in commencing panel proceedings and setting the jurisdictional boundaries of such proceedings. Therefore, we reject the proposition that an examination of the specificity requirement under Article 6.2 of the DSU must involve a substantive inquiry as to the existence and precise content of the measure.”(238)

189. In US — Continued Zeroing, the Appellate Body also stated that:

“[S]o long as each measure is discernible in the panel request, the complaining party is not required to identify in its panel request each challenged measure independently from other measures in order to comply with the specificity requirement in Article 6.2 of the DSU.”(239)

190. In US — Zeroing (Japan) the Appellate Body recalled that a panel request must be “sufficiently precise” for two reasons:

“First, it forms the basis for the terms of reference of the panel, pursuant to Article 7 of the DSU(240); and, secondly, the terms of reference, and the request for the establishment of a panel on which they are based, serve the due process objective of notifying respondents and potential third parties of the nature of the dispute and of the parameters of the case to which they must begin preparing a response.(241)”(242)

191. In China — Intellectual Property Rights, the Panel concluded that the request for establishment of a panel had been unclear, finding that “the United States’ submissions to the substantive meetings with the Panel did not clarify that a claim was being made under
Article 2(6) of the Berne Convention (1971).”(243) On this basis, the Panel found that a claim under
Article 2(6) of the Bern Convention (1971) “lies outside the Panel’s terms of reference.”(244) The Panel stated that it had “carefully reviewed the United States’ request for establishment of a panel and its submission”(245) and observed that “at no point has the United States actually asserted that
Article 4 of China’s Copyright Law, in fact, applies to performances and phonograms or sound recordings and is, in fact, inconsistent with
Article 14 of the TRIPS Agreement”.(246) The Panel concluded that it could not “discern a claim on which it may rule.”(247)

(c) Title of the case

192. In the EC — Selected Customs Matters, the Panel stated that the title of the case has no bearing upon the scope of a Panel’s terms of reference. According to the Panel:

“[A] panel’s terms of reference are defined by the measures and claims that have been identified in the request for establishment of a panel. Neither Article 7 of the DSU, which defines the panel’s terms of reference, nor the linked requirements of Article 6.2 of the DSU, make any reference to the title of the case. Ultimately, the breadth or narrowness of a particular challenge will be governed exclusively by the terms of the relevant request for establishment of a panel.”(248)

“The request must: (i) be in writing; (ii) indicate whether consultations were held; (iii) identify the specific measures at issue; and (iv) provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly. In its fourth requirement, Article 6.2 demands only a summary — and it may be a brief one — of the legal basis of the complaint; but the summary must, in any event, be one that is ’sufficient to present the problem clearly’. It is not enough, in other words, that ‘the legal basis of the complaint’ is summarily identified; the identification must ‘present the problem clearly’.”(249)

194. In US — Carbon Steel, the Appellate Body summarized its previous jurisprudence on the requirements of Article 6.2. The Appellate Body noted the importance of the two distinct requirements, namely, identification of the specific measures at issue, and the provision of a brief summary of the claims. Referring to Guatemala — Cement I, it concluded that both requirements “together, they comprise the ‘matter referred to the DSB’, which forms the basis for a panel’s terms of reference under Article 17.1 of the DSU”:

“There are, therefore, two distinct requirements, namely identification of the specific measures at issue, and the provision of a brief summary of the legal basis of the complaint (or the claims). Together, they comprise the ‘matter referred to the DSB’, which forms the basis for a panel’s terms of reference under Article 17.1 of the DSU.(250)

The requirements of precision in the request for the establishment of a panel flow from the two essential purposes of the terms of reference. First, the terms of reference define the scope of the dispute. Secondly, the terms of reference, and the request for the establishment of a panel on which they are based, serve the due process objective of notifying the parties and third parties of the nature of a complainant’s case.(251)
When faced with an issue relating to the scope of its terms of reference, a panel must scrutinize carefully the request for establishment of a panel ‘to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU.’(252)

As we have said previously, compliance with the requirements of Article 6.2 must be demonstrated on the face of the request for the establishment of a panel. Defects in the request for the establishment of a panel cannot be ‘cured’ in the subsequent submissions of the parties during the panel proceedings.(253) Nevertheless, in considering the sufficiency of a panel request, submissions and statements made during the course of the panel proceedings, in particular the first written submission of the complaining party, may be consulted in order to confirm the meaning of the words used in the panel request and as part of the assessment of whether the ability of the respondent to defend itself was prejudiced.(254) Moreover, compliance with the requirements of Article 6.2 must be determined on the merits of each case, having considered the panel request as a whole, and in the light of attendant circumstances.(255),(256)

195. In China — Publications and Audiovisual Products, the Panel examined what is required of a party to satisfy the obligations to (i) identify the specific measure at issue; (ii) provide a brief summary of the legal basis of the complaint; (iii) sufficient to present the problem clearly; and (iv) relationship between the panel request and the Panel’s term of reference.(257)

196. The Appellate Body in EC — Selected Customs Matters explained that Article 6.2 contains two distinct requirements that relate to different aspects of the complainant’s challenge of a measure taken by another Member, namely identification of the specific measures at issue and, the provision of a brief summary of the legal basis of the complaint (or the claims). Being mindful of the due process considerations underlying the DSU, the Appellate Body subsequently emphasized the purpose of these requirements:

“The ’specific measure’ to be identified in a panel request is the object of the challenge, namely, the measure that is alleged to be causing the violation of an obligation contained in a covered agreement. In other words, the measure at issue is what is being challenged by the complaining Member. In contrast, the legal basis of the complaint, namely the ‘claim’ pertains to the specific provision of the covered agreement that contains the obligation alleged to be violated. A brief summary of the legal basis of the complaint required by Article 6.2 of the DSU aims to explain succinctly how or why the measure at issue is considered by the complaining Member to be violating the WTO obligation in question. This brief summary must be sufficient to present the problem clearly. Taken together, these different aspects of a panel request serve not only to define the scope of a dispute, but also to meet the due process requirements.”(258)

197. The Appellate Body in EC — Selected Customs Matters went on to rule that questions pertaining to the identification of the “measures at issue” and the “claims” relating to alleged violation of WTO obligations, set out in a panel request, should be addressed separately since the requirements under Article 6.2 of the DSU are conceptually different and should not be confused:

“[T]he panel request identifies the measures and the claims that a panel will have the authority to examine and on which it will have the authority to make findings. The question of whether a measure falls within a panel’s terms of reference is a threshold issue, distinct from the question of whether a measure is consistent or not with the legal provision(s) of the covered agreement(s) to which the panel request refers. Therefore, questions pertaining to the identification of the ‘measures at issue’ and the ‘claims’ relating to alleged violations of WTO obligations, set out in a panel request, should be analyzed separately.”(259)

198. The Appellate Body reiterated the point in Australia — Apples, where it found that the Panel had conflated the requirement to identify the measure at issue with the requirement to identify the legal basis of the complaint (the claim). The Appellate Body began its analysis of this issue by recalling that:

“[T]he two requirements in Article 6.2 of the DSU are distinct and “should not be confused”.(260) In Guatemala — Cement I, the Appellate Body indicated that, because the panel read the word “measure” in Article 6.2 of the DSU “as synonymous with allegations of violations” of the covered agreements, the panel in that dispute had “blur[red] the distinction between a ‘measure’ and ‘claims’ of nullification or impairment of benefits”.(261) Similarly, in EC — Selected Customs Matters, the Appellate Body determined that the panel — by reading the term “measure at issue” in Article 6.2 in the light of the obligation allegedly violated — had blurred the distinction between measures and claims.(262) Accordingly, the measure at issue and the claim are two distinct elements that a complainant must identify in order to bring a matter properly within the terms of reference of a panel. In checking that a complainant has complied “with both the letter and the spirit of Article 6.2 of the DSU”(263), a panel must satisfy itself that both of these elements have been properly identified in the panel request.”(264)

199. Turning to the Panel’s approach in that case, the Appellate Body stated that:

“[I]t appears to us that the Panel has conflated the requirement to identify the measure at issue with the requirement to identify the legal basis of the complaint (the claim). The Panel began its analysis by formulating the question before it as whether the measures relating to New Zealand’s claims under Annex C(1)(a) and Article 8 were within the Panel’s terms of reference. The Panel further considered that the 17 requirements, on the one hand, and “their development”, on the other hand, are separate measures. The Panel explained that its findings regarding the measures within the Panel’s terms of reference did not cover “the procedure through which the requirements were developed in the IRA process”. The Panel then considered ways in which New Zealand could have identified the measure alleged to infringe the obligation in Annex C(1)(a) and Article 8 of the SPS Agreement. However, having focused its analysis entirely on which measures were or should have been identified by New Zealand, the Panel went on to find that “New Zealand’s Annex C(1)(a)claim and its consequential claim under Article 8 of the SPS Agreement are outside of the Panel’s terms of reference in this dispute”.

As previously noted, measures and claims are distinct, and Article 6.2 sets out separate requirements that must each be satisfied in a panel request in order for a
matter to form part of a panel’s terms of reference. The Panel failed to take proper account of this key distinction between measures and claims by, on the one hand, undertaking an analysis as to whether New Zealand had identified the specific measure at issue in its panel request and, on the other hand, finding that it was New Zealand’s claims, not the measure, that were outside the Panel’s terms of reference.”(265)

(ii) The distinction between jurisdictional issues and issues to be resolved on the merits

200. In Australia — Apples, the Appellate Body found that the Panel erred by conflating the question of whether certain measures were identified in the panel with the question of the merits of the claim:

“The Panel further asked “what does New Zealand challenge under Annex C(1)(a)? What, according to New Zealand, causes the violation of Annex C(1)(a)?” The Panel, therefore, seems to have understood that the question of whether the 17 measures identified in the panel request can violate, or cause the violation of, the obligation in Annex C(1)(a) and Article 8 of the SPS Agreement was a jurisdictional question. We disagree with this approach by the Panel. For a matter to be within a panel’s terms of reference — in the sense of Articles 6.2 and 7.1 of the DSU — a complainant must identify “the specific measures at issue” and the “legal basis of the complaint sufficient to present the problem clearly”. Moreover, “a complaining Member enjoys certain discretion in the identification of the specific measure at issue”(266) and “[a]s long as the specificity requirements of Article 6.2 are met, [there is] no reason why a Member should be precluded from setting out in a panel request ‘any act or omission’ attributable to another Member as the measure at issue”,(267)Article 6.2 of the DSU does not impose any additional requirement, as the Panel’s analysis implies, that a complainant must, in its request for establishment of a panel, demonstrate that the identified measure at issue causes the violation of, or can violate, the relevant obligation.

In this dispute, the Panel’s analysis under Article 6.2 should have been confined to determining what New Zealand had identified as the specific measures at issue and, separately, what New Zealand had identified as the legal basis for its complaint (its claims).(268) The Panel had already found in its preliminary ruling that New Zealand’s panel request identified the 17 measures, and Annex C(1)(a) and
Article 8 of the SPS Agreement as the basis for New Zealand’s claims, and that, therefore, this matter was within the Panel’s terms of reference.(269)

By contrast, the question of whether the measures identified in the panel request can violate, or cause the violation of, the obligation in Annex C(1)(a) and Article 8 is a substantive issue to be addressed and resolved on the merits.”(270)

(b) First requirement: The request must be in writing

(i) Relevance of the text of the panel request

201. In EC — Bananas III, the Appellate Body referred to the Panel’s task to carefully examine the request for its establishment to ensure that it complies with Article 6.2 requirements:

“We recognize that a panel request will usually be approved automatically at the DSB meeting following the meeting at which the request first appears on the DSB’s agenda. As a panel request is normally not subjected to detailed scrutiny by the DSB, it is incumbent upon a panel to examine the request for the establishment of the panel very carefully to ensure its compliance with the bother the letter and the spirit of Article 6.2 of the DSU…”(271)

202. In Japan — DRAMS (Korea), the Panel, referring to the Appellate Body’s findings in US — Carbon Steel and the panel’s findings in Canada — Wheat Exports and Grain Imports, observed that the due process objective of the second sentence of Article 6.2 of the DSU could only be properly upheld if panels apply that provision on the basis of the text of the panel request:

“We agree with the approach adopted by the Appellate Body in US-Carbon Steel, as subsequently applied by the panel in Canada — Wheat Exports and Grain Imports. In our view, the due process objective of the second sentence of Article 6.2 of the DSU may only properly be upheld if panels apply that provision on the basis of the text of the Request for Establishment. We believe that consideration of an actual prejudice suffered during the panel process undermines that due process objective, since it allows a Member to correct any lack of clarity in its request during the panel proceedings, even though the request may not have been sufficiently clear for the respondent to being preparing its defence at the beginning of the panel process.”(272)

203. In Australia — Apples, the Appellate Body confirmed that subsequent submissions by parties during the panel proceedings may only be used to “confirm the meaning of the words used” in the panel request:

“It is also well established that compliance with the requirements of Article 6.2 must be determined on the face of the request for the establishment of the panel and that “[d]efects [therein] cannot be ‘cured’ in the subsequent submissions of the parties during the panel proceedings”.(273) Such submissions may be used only to confirm the meaning of the words used in the panel request and in assessing whether there has been prejudice to the responding Member’s ability to prepare its defence.”(274)

204. In EC and certain member States — Large Civil Aircraft, the Appellate Body emphasized that a panel’s terms of reference must be objectively determined on the basis of the panel request as it existed at the time of filing:

“[A] party’s submissions during panel proceedings cannot cure a defect in a panel request. We consider this principle paramount in the assessment of a panel’s jurisdiction. Although subsequent events in panel proceedings, including submissions by a party, may be of some assistance in confirming the meaning of the words used in the panel request, those events cannot have the effect of curing the failings of a deficient panel request. In every dispute, the panel’s terms of reference must be objectively determined on the basis of the panel request as it existed at the time of filing.”(275)

(c) Second requirement: The request must indicate whether consultations were held

205. In Brazil — Desiccated Coconut, the Panel examined the request of the Philippines to make a finding that Brazil’s refusal to hold consultations was inconsistent with Articles 4.1, 4.2 and 4.3 of the DSU. The Panel recalled that Article 6.2 of the DSU requires that a request for the establishment of a panel “shall indicate whether consultations were held, identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly”. The Panel stated:

“The Philippines’ request for establishment of a panel clearly fulfils the first requirement of Article 6.2, by indicating the Philippines’ view that consultations were not held because Brazil refused to consult…However, there is nothing in the request for establishment of a panel that would lead to the conclusion that the requested panel would be asked to make any finding regarding Brazil’s failure to consult…We therefore conclude that the Philippines’ claim regarding Brazil’s failure to consult is not within our terms of reference.”(276)

206. In Brazil — Aircraft, the Panel considered that a preliminary objection could properly be sustained if a party established that the required consultations had not been held with respect to a dispute:

“A party is not entitled to request establishment of a panel unless consultations have been held. Specifically, Article 4.2 of the DSU provides that a complaining party may request establishment of a panel only if ‘consultations fail to settle a dispute’. Similarly, Article 4.4 of the SCM Agreement allows a ‘matter’ to be referred to the DSB for establishment of a panel only if consultations have failed to lead to a mutually agreed solution. Given that Article 6.1 of the DSU and Article 4.4 of the SCM Agreement essentially require the DSB to establish a panel automatically upon request of a party, a panel cannot rely upon the DSB to ascertain that requisite consultations have been held and to establish a panel only in those cases.(277) Accordingly, we consider that a panel may consider whether consultations have been held with respect to a ‘dispute’, and that a preliminary objection may properly be sustained if a party can establish that the required consultations had not been held with respect to a dispute. We do not believe, however, that either Article 4.2 of the DSU or Article 4.4 of the SCM Agreement requires a precise identity between the matter with respect to which consultations were held and that with respect to which establishment of a panel was requested.”(278)

207. In Mexico — Corn Syrup (Article 21.5 US), the Appellate Body addressed the requirement to indicate in a panel request “whether consultations were held” in a situation where this procedural step was not executed. Drawing from the fact that the failure to hold consultations does not deprive the panel of its authority to rule on the case before it, the Appellate Body stated:

“Article 4.7 … relates the conduct of the responding party concerning consultations to the complaining party’s right to request the establishment of a panel. This provision states that the responding party may agree with the complaining party to forgo the potential benefits that continued pursuit of consultations might bring. Thus, Article 4.7 contemplates that a panel may be validly established notwithstanding the shortened period for consultations, as long as the parties agree. Article 4.7 does not, however, specify any particular form that the agreement between the parties must take.

In addition … pursuant to Article 6.2 of the DSU, one of the requirements for requests for establishment of a panel is that such requests must ‘indicate whether consultations were held’. The phrase ‘whether consultations were held’ shows that this requirement in Article 6.2 may be satisfied by an express statement that no consultations were held. In other words, Article 6.2 also envisages the possibility that a panel may be validly established without being preceded by consultations.

Thus, the DSU explicitly recognizes circumstances where the absence of consultations would not deprive the panel of its authority to consider the matter referred to it by the DSB. In our view, it follows that where the responding party does not object, explicitly and in a timely manner, to the failure of the complaining party to request or engage in consultations, the responding party may be deemed to have consented to the lack of consultations and, thereby, to have relinquished whatever right to consult it may have had.”(279)

208. In Mexico — Corn Syrup (Article 21.5 US), the Appellate Body explained that the authority of a panel cannot be invalidated by the absence, in the request for establishment of the panel, of an indication “whether consultations were held”:

“In assessing the importance of the obligation ‘to indicate whether consultations were held’, we observe that the requirement will be satisfied by the inclusion, in the request for establishment of a panel, of a statement as to whether consultations occurred or not. The purpose of the requirement seems to be primarily informational-to inform the DSB and Members as to whether consultations took place. We also recall that the DSU expressly contemplates that, in certain circumstances, a panel can deal with and dispose of the matter referred to it even if no consultations took place. Similarly, the authority of the panel cannot be invalidated by the absence, in the request for establishment of the panel, of an indication ‘whether consultations were held’. Indeed, it would be curious if the requirement in Article 6.2 to inform the DSB whether consultations were held was accorded more importance in the dispute settlement process than the requirement actually to hold those consultations.”(280)

(d) Third requirement: The request must identify the specific measures at issue

(i) General

209. The Appellate Body has found that the degree of specification required in identifying the measure at issue must be assessed on a case-by-case basis.(281) Whether the specific measure at issue has been sufficiently identified in the request for establishment will depend upon the ability of the respondent to defend itself given the description of the measure in the request.(282)

210. The Appellate Body, in EC — Selected Customs Matters noted that questions pertaining to the identification of the “measures at issue” and the “claims” relating to alleged violation of WTO obligations, set out in a panel request, should be addressed separately since the requirements under Article 6.2 of the DSU are conceptually different and should not be confused. See
paragraph 197 above.

211. In Canada — Wheat Exports and Grain Imports, the Panel stated that the ordinary meaning of the phrase “identify the specific measures at issue” is to establish the identity of the precise measures at issue.(283) The Panel stated that:

“In considering whether a panel request can be said to have identified the specific, or precise, measures at issue, we find relevant the statement by the Appellate Body that whether the actual terms used in a panel request to identify the measures at issue are sufficiently precise to meet the requirements of Article 6.2 ‘depends […]. upon whether they satisfy the purposes of [those] requirements’. We also find relevant the statement by the Appellate Body that ‘compliance with the requirements of Article 6.2 must be determined on the merits of each case, having considered the panel request as a whole, and in the light of attendant circumstances’.

[…]

We consider that in the absence of an explicit identification of a measure of general application by name, […] sufficient information must be provided in the request for establishment of a panel itself that effectively identifies the precise measures at issue. Whether sufficient information is provided on the face of the panel request will depend, as noted above, on whether the information provided serves the purposes of Article 6.2, and in particular its due process objective, as well as the specific circumstances of each case, including the type of measure that is at issue.”(284)

212. In Colombia — Ports of Entry, Colombia argued that “Panama’s request for establishment fails to identify the specific measures at issue as required in Article 6.2 of the DSU, in respect of the use of indicative prices by Colombia’s customs authorities”.(285) Panama, on the other hand, argued that “its request for establishment makes clear that the measure at issue is the use of ‘indicative prices’, which ‘apply to specific goods from all countries except those with which Colombia has signed free trade agreements’ for the purpose of determining the value of those goods to be used as the basis for levying (a) import duties and (b) sales tax.”(286) The Panel noted that “Colombia’s ability to defend itself does not appear to have been impaired by Panama’s definition of the measures at issue”.(287) On this basis, the Panel found that “Panama’s request for establishment complies with the requirements of Article 6.2 of the DSU as far as the definition of the measures at issue regulating Colombia’s use of indicative prices is concerned.”(288)

213. In China — Publications and Audiovisual Products, the Panel concluded that it was “reasonable for China to reasonably infer that the exclusion of the Film Distribution and Exhibition Rule from Part I of the panel request was deliberate in view of its explicit inclusion in Part III”; therefore “China could infer in good faith that the omission of reference to the Film Distribution and Exhibition Rule in Part I meant that the United States was not challenging the Film Distribution and Exhibition Rule under this claim”. The Panel further concluded that the Film Distribution and Exhibition Rule was “outside its terms of reference in the context of the U.S. claims regarding China’s trading rights commitments under the Accession Protocol.”(289)

(ii) “identify”

Identification of measure

214. In EC — Bananas III, the “basic EC regulation at issue” was identified in the request for establishment of the Panel. In addition, the request referred in general terms to “subsequent EC legislation, regulations and administrative measures … which implement, supplement and amend [the EC banana] regime”. The Panel found that for purposes of Article 6.2 this reference was sufficient to cover all European Communities legislation dealing with the importation, sale and distribution of bananas because the measures that the complainants were contesting were “adequately identified”, even though they were not explicitly listed.(290) The Appellate Body agreed that the panel request “contains sufficient identification of the measures at issue to fulfil the requirements of Article 6.2”.(291)

215. In Japan — Film, Japan requested the Panel to exclude eight measures from consideration because they were not set forth in either the request for consultations or the request for the establishment of a panel. Although the measures in question had not been “explicitly described” in the panel request, the Panel considered those measures to be within its terms of reference because they were ‘implementing measures’ based on a basic framework law specifically identified in the Panel request, which specified the form and circumscribed the possible content and scope of such implementing measures. The Panel established a clear relationship standard:

“The question thus becomes whether the ordinary meaning of the terms of Article 6.2, i.e., that ‘the specific measures at issue’ be identified in the panel request, can be met if a ‘measure’ is not explicitly described in the request. To fall within the terms of Article 6.2, it seems clear that a ‘measure’ not explicitly described in a panel request must have a clear relationship to a ‘measure’ that is specifically described therein, so that it can be said to be ‘included’ in the specified ‘measure’. In our view, the requirements of Article 6.2 would be met in the case of a ‘measure’ that is subsidiary or so closely related to a ‘measure’ specifically identified, that the responding party can reasonably be found to have received adequate notice of the scope of the claims asserted by the complaining party. The two key elements — close relationship and notice — are inter-related: only if a ‘measure’ is subsidiary or closely related to a specifically identified ‘measure’ will notice be adequate. For example, we consider that where a basic framework law dealing with a narrow subject matter that provides for implementing ‘measures’ is specified in a panel request, implementing ‘measures’ might be considered in appropriate circumstances as effectively included in the panel request as well for purposes of Article 6.2. Such circumstances include the case of a basic framework law that specifies the form and circumscribes the possible content and scope of implementing ‘measures’.”(292)

216. The Panel in Argentina — Footwear (EC) found that “it is the identification of [the] measures which is primarily relevant for the purposes of Article 6.2 of the DSU”:

“[W]e consider that the EC’s request primarily and unambiguously identifies the provisional and definitive measures (rather than only the cited resolutions and promulgations as such). In our view, it is the identification of these measures (rather than merely the numbers of the resolutions and the places of their promulgation in the Official Journal) which is primarily relevant for purposes of Article 6.2 of the DSU. Therefore, we consider that it is the provisional and definitive measures in their substance rather than the legal acts in their original or modified legal forms that are most relevant for our terms of reference. In our view, this is consistent with the Appellate Body’s findings in the Guatemala — Cement case.”(293)

217. The Panel in US — Carbon Steel noted the findings of the Panel in Japan — Film (see
paragraph 215 above) and indicated that the expedited review procedure concerned was not a “measure” that was “subsidiary” or “closely related” to “any of the measures specifically identified”:

“The United States explains that, upon automatic initiation by the DOC of a sunset review within five years of the date of publication of a CVD order, a review can follow one of three basic paths: (i) revocation of the order; (ii) an expedited sunset review; and (iii) a full sunset review. We do not consider that the European Communities’ general discussion of the automatic initiation of sunset reviews by the DOC is sufficient to put the United States — as well as other Members — on notice that the expedited review procedure was also under challenge. We note that the European Communities’ request refers to ‘certain aspects of the sunset review procedure which led to [the DOC decision not to revoke the CVDs on carbon steel]’. The challenge is thus apparently to those aspects of the sunset review procedure that have some relevance to the carbon steel case, which is not true of the expedited review procedure, because the carbon steel case involved a full, not expedited, review. We do not consider the expedited review procedure to be ‘a ‘measure’ that is subsidiary, or so closely related to’ any of the measures specifically identified, ‘that the responding party can reasonably be found to have received adequate notice of the scope of the claims asserted by the complaining party’. We, therefore, find that the expedited review procedure is not sufficiently related to a measure or measures that are specifically identified in the request for establishment as to properly bring it within our terms of reference.”(294),(295)

218. In EC — Export Subsidies on Sugar, the EC argued that the identification of the measure at issue in the panel requests as the export subsidies granted under Regulation No. 1260/2001 or, even more vaguely, under the “EC sugar regime” was not sufficient for purposes of complying with the requirement of Article 6.2 of the DSU, because that provision requires not just the identification of a “measure”, but of the “specific measure at issue”.(296) In particular, the EC contended that sales of C beet at prices below the minimum prices for A and B beet were not identified as a “payment” in the panel requests of the Complaining Parties and that, therefore, this “payment” fell outside the Panel’s terms of reference.(297) The Appellate Body, however, confirmed the finding of the Panel by arguing that although the panel requests did not specifically identify that low-priced sales of C beet by growers to producers was one form of such alleged “payments”, the panel requests would have sufficiently informed and alerted the EC about this practice:

“We note, first, as did the Panel, that the panel requests of all the Complaining Parties have clearly identified the ’specific measures at issue’ as the subsidies accorded under EC Regulation 1260/2001 and related instruments (the ‘EC sugar regime’), and the alleged violations as the European Communities’ exports of subsidized sugar in excess of the European Communities’ commitment levels in contravention of Articles 3 and 8 of the Agreement on Agriculture.

…

We agree with the European Communities that the panel requests did not specifically identify that low-priced sales of C beet by growers to producers was one form of such alleged ‘payments’. Nevertheless, we consider that, taken as a whole, the panel requests should have informed the European Communities that the Complaining Parties were alleging in their panel requests that C sugar exports below total average cost of production were being enabled by subsidies in the form of ‘payments’ within the meaning of Article 9.1(c) of the Agreement on Agriculture. C beet being a critical input for C sugar production, and C beet not being eligible for a minimum guaranteed price, unlike A and B beet, the panel requests should have alerted the European Communities that one form of such alleged ‘payments’ could be low-priced sales of C beet by growers to producers.”(298)

219. The Appellate Body in EC — Selected Customs Matters discussed the requirement to properly identify the measures at issue when drafting a panel request:

“Interpreting the term ‘measure at issue’ in Article 6.2 of the DSU in the light of the substance of the specific WTO obligation that is allegedly being violated would generate uncertainty and complexity in WTO dispute settlement proceedings. When drafting a request for the establishment of a panel, the complainant would have to foresee the possible restrictions that the substance of the legal provisions might impose on the type of measure that could be challenged. The identification of the measures at issue in the panel request might prove to be even more complex where the challenge concerns a plurality of provisions of the covered agreements. Moreover, the existence, nature, and scope of possible restrictions would depend on the panel’s interpretation of the substance of those legal provisions. The respondent might also be placed in an uncertain situation in presenting its defence because it would have to guess what the panel would identify as the measure at issue on the basis of the panel’s interpretation of the substance of the alleged violation. This could lead to unnecessary litigation on a panel’s terms of reference, as the responding party may choose to contend at a preliminary stage that, in the light of the substance of the legal provision on which a specific claim is based, the measure identified in the panel request does not fall within the panel’s terms of reference.”(299)

220. In US — FSC (Article 21.5 — EC II), the panel addressed the issue of an alleged failure by the EC to identify a measure at issue. The panel held that the measure at issue would be within its terms of reference to the extent that it was adequately identified in the panel request as required by Article 6.2:

“The issue before us does not involve the omission of a legal basis for a claim. Rather, it concerns an alleged failure to identify a measure at issue (Section 5 of the ETI Act, grandfathering original FSC subsidies).

This measure would be within our terms of reference to
the extent that it is adequately identified in the EC request for the establishment of the Panel, as required by Article 6.2 of the DSU.

In general, when faced with a question relating to the scope of its terms of reference, a panel must ‘examine the request for the establishment of the panel very carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU.’(300) The task of assessing the sufficiency of a panel request for the purpose of Article 6.2 may be undertaken on a case-by-case basis, in consideration of the panel request as a whole, and in the light of the attendant circumstances. There may be a need to consider whether the defendant’s ability to defend itself was prejudiced in light of the text of the panel request.”(301)

221. In US — Zeroing (EC) (Article 21.5 — EC), the United States alleged that certain measures were outside the terms of reference because they were not properly identified in the panel request. The Panel stated that it would “determine whether the EC panel request sufficiently put the United States on notice that it was bringing a challenge against the measures listed in the Annex to that panel request”. Additionally, the Panel asserted “[t]he other consideration is, in our view, whether the EC panel request clearly defines the scope of this compliance dispute,” that is, “whether the EC Article 21.5 panel request creates uncertainly as to the measures that are the subject of this compliance proceeding”. The Panel further asserted that the EC panel request “sufficiently identifies the “subsequent reviews” as “measures at issue” in this dispute” and it therefore “decline [d] to make the ruling under Article 6.2 of the DSU requested by the United States.”(302)

222. Amongst other procedural objections relating to the Panel’s terms of reference, the Panel in China — Publications and Audiovisual Products examined China’s arguments that certain aspects of the measures identified in the panel request were outside the terms of reference as they had not been identified in the narrative portion of the US panel request. The Panel accepted China’s argument ruling that only those measures identified in the narrative portion of the US panel request were within its terms of reference:

“Reading the panel request as a whole, we do not find that the mere reference to the legislative instruments in which the disputed requirements were contained identified the pre-establishment legal compliance, the process for becoming approved as a distributor, or the decision making criteria applied by the approving agency as specific measures at issue such that China could reasonably conclude that they were included within the US claims. The United States did not inform China that it was challenging every possible discriminatory requirement in its measures, but rather the specific ones described in the narratives. Just as the European Communities did in US — Carbon Steel, the United States has, through its description of its claim in the panel request, only notified China that its claim concerned the specific requirements set forth in the panel request. Therefore, we find that these additional requirements (pre-establishment legal compliance, approval process requirements, and
decision making criteria) are outside our terms of reference.”(303)

223. In Australia — Apples, Australia raised a procedural concern regarding the consistency of the New Zealand panel request with Article 6.2 of the DSU. In its panel request, New Zealand asserted that the measures specified in and required by Australia pursuant to the Final import risk analysis report for apples from New Zealand (FIRA) were inconsistent with the obligations of Australia under the SPS Agreement. New Zealand then proceeded to spell out 17 specific requirements set out in the IRA. In a preliminary ruling, the Panel, placing emphasis on the text of the panel request and the length and complexity of the FIRA, decided that the FIRA as a whole was not a measure at issue in this dispute and that only the 17 measures identified in the panel request fell within the Panel’s terms of reference:

“Looking at the text of New Zealand’s panel request, the Panel finds that, with
respect to the 17 items identified by New Zealand through 17 separate bullet points, the request is sufficiently precise in identifying the specific measures at issue with respect to those 17 items, pursuant to Article 6.2 of the DSU.

On the other hand, given the length and complexity of Australia’s FIRA, the Panel finds that the broad reference in New Zealand’s panel request to the ‘measures specified in and required by Australia pursuant to the [FIRA]’ fails to satisfy the requirement of sufficient clarity in the identification of the specific measures at issue set forth in Article 6.2 of the DSU. Accordingly, the Panel finds that its terms of reference are limited to the 17 measures specifically identified by New Zealand in its panel request and do not encompass other measures that may be contained in Australia’s FIRA, but which were not identified with sufficient precision in the panel request.”(304)

224. In China — Raw Materials, the panel requests contained an introductory paragraph and then three sections. Each section referred to a generic type of measure — export quotas, export duties and additional restraints imposed on exportation. Under each section, the complainants identified a list of measures prefaced with the phrase “among others”. The Panel, in its preliminary ruling, found this phrase to be too “open ended” and that permitting the use of this phrase to expand the list of measures at issue would not contribute to the “security and predictability” of the WTO dispute settlement system. The Panel therefore restricted the measures at issue to those explicitly identified in the panel request:

“The Panel is concerned with certain aspects of the three lists of challenged measures. After the narrative
paragraph(s) in each of the three sections, the complainants identifying the lists of measures with the following phrase: ‘… these Chinese measures are reflected in, among others’(emphasis added). This phrase indicates that the measures listed by bullet points in the panel requests are not the only measures allegedly inconsistent with WTO obligations and leaves open the possibility that the Complainants might include additional measures in subsequent missions.

The Panel is of the view that the Complainant cannot be allowed to include additional measures other than those listed and identified by the bullet points in the panel requests. Such an ‘open ended’ list would not contribute to the ’security and predictability’ of the WTO dispute settlement system as required by Article 3.2 of the DSU.

For this reason, the Panel considers only the listed measures expressly identified by bullet points in the three sections of the Complainant’s panel requests fall within the Panel’s terms of reference and will thus be examined by the Panel.”(305)

226. In EC — Computer Equipment, the Appellate Body considered whether the measures in dispute and the products affected by such measures were identified with sufficient specificity by the United States in its request for the establishment of a panel. The United States’ request for the establishment of panel referred to “all types of LAN equipment” and “PCs with multimedia capability”. The Appellate Body considered whether these terms sufficiently defined the products at issue:

“Article 6.2 of the DSU does
not explicitly require that the products to which the ’specific measures at issue’ apply be identified. However, with respect to certain WTO obligations, in order to identify ‘the specific measures at issue’, it may also be necessary to identify the products subject to the measures in dispute.

LAN equipment and PCs with multimedia capacity are both generic terms. Whether these terms are sufficiently precise to ‘identify the specific measure at issue’ under Article 6.2 of the DSU depends, in our view, upon whether they satisfy the purposes of the requirements of that provision.

…

The European Communities argues that the lack of precision of the term, LAN equipment, resulted in a violation of its right to due process which is implicit in the DSU. We note, however, that the European Communities does not contest that the term, LAN equipment, is a commercial term which is readily understandable in the trade. The disagreement between the European Communities and the United States concerns its exact definition and its precise product coverage. We also note that the term, LAN equipment, was used in the consultations between the European Communities and the United States prior to the submission of the request for the establishment of a panel and, in particular, in an ‘Information Fiche’ provided by the European Communities to the United States during informal consultations in Geneva in March 1997. We do not see how the alleged lack of precision of the terms, LAN equipment and PCs with multimedia capability, in the request for the establishment of a panel affected the rights of defence of the European Communities in the course of the panel proceedings. As the ability of the European Communities to defend itself was not prejudiced by a lack of knowing the measures at issue, we do not believe that the fundamental rule of due process was violated by the Panel.”(306),(307)

227. In EC — Chicken Cuts, Brazil and Thailand appealed the Panel’s finding on the identification of the products at issue arguing that, although Article 6.2 of the DSU does not explicitly require that the products at issue be identified in the panel request, in the past, the Appellate Body (in EC — Computer Equipment) has relied on the product description contained in the panel request to determine the scope of the measure at issue. Moreover, Brazil and Thailand argued that, if the products at issue are in fact described in the panel request, then those products constitute the products within the panel’s terms of reference.(308) The Appellate Body rejected these arguments and stated:

“We are not persuaded by these arguments. Article 6.2 of the DSU does not refer to the identification of the products at issue; rather, it refers to the identification of the specific measures at issue. Article 6.2 contemplates that the identification of the products at issue must flow from the specific measures identified in the panel request. Therefore, the identification of the product at issue is generally not a separate and distinct element of a panel’s terms of reference; rather, it is a consequence of the scope of application of the specific measures at issue. In other words, it is the measure at issue that generally will define the product at issue.”(309)

228. In Australia — Salmon, the Appellate Body examined whether the Panel had interpreted correctly its terms of reference with respect to the measure and the product at issue in this dispute. Australia argued that the Panel had exceeded its terms of reference both in terms of products and in terms of the measure at issue. In its request for the establishment of a panel, Canada had identified the measure and the product at issue as follows: “The Australian Government’s measures prohibiting the importation of fresh, chilled or frozen salmon … and any amendments or modifications to it.”(310) The Panel stated that the product coverage of this dispute was limited, in accordance with the request for the establishment of a panel, to “fresh, chilled or frozen salmon” and held explicitly that the product coverage “does exclude heat-treated product”(311) and that “heat-treated product falls outside the product coverage of this dispute”.(312) As a result, the Appellate Body rejected Australia’s claim that the Panel had exceeded its terms of reference with respect to the product at issue.(313) However, the Appellate Body reversed the Panel’s conclusions with respect to the measures at issue. One of the Australian measures at issue was an import prohibition on all salmon; another measure, however, allowed imports which had been subject to “heat treatment”. The Panel interpreted this latter measure to mean that the heat treatment required applied not only to smoked salmon, but also to other categories of salmon, including fresh, chilled or frozen salmon; specifically, the Panel had held that the “heat treatment” requirement was merely the corollary (“two sides of a single coin”) of the import prohibition contained in another measure. The Panel had concluded that imports of fresh, chilled or frozen salmon were prohibited under one measure, unless they received the required “heat treatment” provided for in another measure:

“We recall that the Panel stated that the measure at issue in this dispute ‘is QP86A as implemented or confirmed by the 1988 Conditions, the 1996 Requirements and the 1996 Decision, and this in so far as it prohibits the importation into Australia of fresh, chilled or frozen salmon’. As indicated above, the Panel interpreted its terms of reference to include the 1988 Conditions, by considering them to constitute a measure ‘prohibiting the importation of fresh, chilled or frozen salmon’ unless heat-treated as prescribed. We recall that in the context of its examination of whether Australia’s measure was consistent with Article 5.1, the Panel treated the import prohibition and the heat-treatment requirement as ‘two sides of a single coin’. It said that a consequence of Australia’s sanitary requirement that salmon be heat-treated before it can be imported is that imports of fresh, chilled or frozen salmon are prohibited.

We do not share the Panel’s position. In our
view, the SPS measure at issue in this dispute can only be the measure which is actually applied to the product at issue. The product at issue is fresh, chilled or frozen salmon and the SPS measure applicable to fresh, chilled or frozen salmon is the import prohibition set forth in QP86A. The heat-treatment requirement provided for in the 1988 Conditions applies only to smoked salmon and salmon roe, not to fresh, chilled or frozen salmon.”(314)

229. In Korea — Alcoholic Beverages, Korea requested the Panel to issue a preliminary ruling with respect to the specificity of the panel requests of the complainants, in this case, the European Communities and the United States. Korea considered that the phrases used by the European Communities (“certain alcoholic beverages falling within HS heading 2208”) and the United States (“other distilled spirits such as whisky, brandy, vodka, gin and ad-mixtures”) were not specific enough to satisfy Article 6.2. Korea sought this preliminary ruling in order to limit the products at issue in the dispute. The Panel disagreed with Korea:

“The question of whether a panel request satisfies the requirements of Article 6.2 is to be determined on a case by case basis with due regard to the wording of Article 6.2 (…) the question is whether Korea is put on sufficient notice as to the parameters of the case it is defending
…

…

Korea argues that each imported product must be specifically identified in order to be within the scope of the panel proceeding. The complainants argue that the appropriate imported product is all distilled beverages. They claim, in fact, that for purposes of Article III, there is only one category in issue. They claim to have identified specific examples of such distilled alcoholic beverages for purposes of illustration, not as limits to the category.

The issue of the appropriate categories of products to compare is important to this case. In our view, however, it is one that requires a weighing of evidence. As such it is not an issue appropriate for a preliminary ruling in this case. This is particularly so in light of the Appellate Body’s opinion in Japan — Taxes on Alcoholic Beverages
II,(315) that all imported distilled alcoholic beverages were discriminated against. That element of the decision is not controlling on the ultimate resolution of other cases involving other facts; however, it cannot be considered inappropriate for complainants to follow it in framing their request for a panel in a dispute involving distilled alcoholic beverages. While it is possible that in some cases, the complaint could be considered so vague and broad that a respondent would not have adequate notice of the actual nature of the alleged discrimination, it is difficult to argue that such notice was not provided here in light of the identified tariff heading and the Appellate Body decision in the Japan — Taxes on Alcoholic Beverages II. Furthermore, we note that the Appellate Body recently found that a panel request based on a broader grouping of products was sufficiently specific for purposes of Article 6.2.(316) We find therefore, that the complainants’ requests for a panel satisfied the requirements of
Article 6.2
of the DSU.”(317)

230. In US — FSC, the United States argued that the European Communities’ request for the establishment of a panel failed to identify the specific measures at issue because the European Communities did not identify the specific products in question, and “the nature of export subsidy obligations imposed by the Agreement on Agriculture differ depending on the products at issue and commitments made by the United States
there-under.”(318) The Panel found that the request for the establishment satisfied the requirements of Article 6.2 of the DSU and stated:

“In its request for establishment of a panel, the European Communities states that in its view the FSC is an export subsidy and that ‘the United States has declared that the [FSC] Scheme is not taken into account for the purpose of compliance with their commitments under the AA …’ Accordingly, given the inherently all-encompassing nature of this claim, it constitutes a claim that the FSC could give rise to violations of the Agreement on Agriculture with respect to any agricultural product. Consequently, and in the absence of any specification as to the products at issue, this request puts the United States and third parties on notice that the European Communities asserts the existence of violations of the Agreement on Agriculture with respect to all agricultural products.”(319)

231. In EC — IT Products, the Panel recalled the observations of the Appellate Body in EC — Chicken Cuts and EC — Computer Equipment regarding the question of identifying the products at issue for the purpose of meeting the requirements of Article 6.2. The Panel observed that the identification of the product at issue is generally not a separate and distinct element of a panel’s terms of reference; rather it is the measure at issue that generally will define the product at issue. However, the Panel also recognized that it may be necessary to identify products at issue when dealing with decisions of customs authorities, in order to identify the specific measures at issue:

“Article 6.2 of the DSU does not refer to the identification of the products at issue, but instead, only refers to the identification of the specific measures at issue. The Appellate Body has explained that under
DSU Article 6.2, ‘the identification of the product at issue is generally not a separate and distinct element of a panel’s terms of reference; rather it is a consequence of the scope of application of the specific measures at issue’. Thus, it concluded, that it is ‘the measures at issue that generally will define the product at issue.’(320) At the same time though, it is recognized that it may be necessary to identify the products at issue, in instances where decisions of customs authorities are under challenge, in order to identify the specific measures at issue.(321)

…

… At this stage the Panel confines itself to the issue of whether the products were sufficiently identified for the purposes of Article 6.2. …

We note here that the contested measures are not individual classification decisions by customs authorities, but rather, as was the case in EC — Chicken Cuts, are generally applicable legal instruments.(322) In our view, the joint panel request focuses on particular aspects of the measures at issue, which in turn identify the products at issue sufficiently for the purposes of Article 6.2 of the DSU. … Thus, for the purposes of fulfilling the requirements of Article 6.2 of the DSU, we conclude there has been sufficient identification of the products for us to proceed with the dispute at hand.”(323)

232. In US — Clove Cigarettes, both parties considered that the Panel would not be exceeding its jurisdiction if it included regular cigarettes in the “likeness” analysis under Article 2.1 of the TBT Agreement and
Article III:4 of the GATT 1994, notwithstanding that Indonesia’s panel request specified that the imported and domestic “like products” in this case were clove cigarettes and menthol cigarettes. The Panel disagreed, and explained that:

“The Panel acknowledges that Article 6.2 of the DSU does not mention the need to specify the products concerned in a panel request. We do however think that the absence of such an obligation should not be taken to mean that, when the particular products affected by the measure at issue are specified in a panel request, such specification is deprived of all relevance. We note that prior panels share our understanding. (324)

We are well aware that, as argued by the United States, the Appellate Body has made a distinction between “claims” and “arguments” in reviewing a panel request pursuant to Article 6.2 of the DSU. Indeed, as explained by the Appellate Body, “Article 6.2 of the DSU requires that the claims, but not the arguments must all be specified sufficiently in the request for the establishment of a panel”.

However, we disagree with the United States in that the identification of the like domestic product in a panel request merely amounts to argumentation. It seems to us that in certain instances, such as the present one, the identification of the specific products at issue in a panel request pertains to the claim at issue, i.e., providing “a brief summary of the legal basis of the complaint”, rather than to the arguments relating to that claim. Indeed, Article 2.1 of the TBT Agreement defines the national treatment obligation it embodies in direct reference to the imported product and the like domestic product; both concepts serve to orient the determination of the scope of such an obligation. Therefore, the identification of those two types of products in the panel request rather pertains to the realm of “providing a brief summary of the legal basis to the complaint” than purely to argumentation.

The Panel acknowledges that, as explained by the Appellate Body in EC — Computer Equipment, “Article 6.2 of the DSU does not explicitly require that the products to which the ’specific measures at issue’ apply be identified”.(325) Furthermore, the Appellate Body in EC — Chicken Cuts noted that “the identification of the product at issue is generally not a separate and distinct element of a panel’s terms of reference”.(326)

We do not disagree with these prior findings and we should not be misinterpreted as saying that a complainant must in all cases identify the products to which the measure at issue applies in order to comply with Article 6.2. We are saying that when the complainant has specified the products in its panel request, as in the present case, and when the claim pertains to a WTO obligation that requires a comparison of particular products, as in the present case, such identification becomes an integral part of the panel’s terms of reference, and cannot be “cured” through argumentation.(327)

Indonesia has argued that its reference to menthol cigarettes in its Panel Request is just an example. The wording of its Panel Request does not seem to coincide with that view. Indeed, as explained above, Indonesia’s Panel Request states that “banning clove cigarettes in the United States while exempting menthol cigarettes from the ban is inconsistent”, inter alia, with “Article III:4 of the GATT 1994 because the measure provides treatment to an imported product, clove cigarettes, that is ‘less favourable’ than that accorded to a like domestic product, menthol cigarettes” (emphasis added). Similarly, Indonesia’s Panel Request claims that the measure at issue is inconsistent with “TBT Article 2.1 because the measure results in treatment that is ‘less favourable’ to imported clove cigarettes than that accorded to a like domestic product, menthol cigarettes” (emphasis added). This wording does not seem to us to be referring to menthol cigarettes simply as an example, but rather as identifying menthol cigarettes as the domestic like product at issue. If it were to serve only as an example, we would have expected Indonesia to say so or at least include language implying it. Moreover, if the domestic product identified in Indonesia’s Panel
Request should be treated as a mere example, then given how the claim is phrased, it would necessarily follow that the imported product identified in the Panel Request (i.e., clove cigarettes) should also be treated as a mere example, meaning that Indonesia would have been in principle free to expand the scope of its national treatment claim in its subsequent submissions to include not only clove cigarettes, but also one or more other types of imported products.”(328)

Identification of industry

233. In Canada — Aircraft, Canada asserted before the Panel that the term “civil aircraft industry” was too broad for the purposes of Article 6.2 of the DSU because “[i]t includes firms ranging from machine shops and metal treatment facilities to those involved in advanced instrumentation and communications equipment.”
(329) The Panel ruled:

“We do not consider that the mere fact that the scope of a measure is identified in the request for establishment by reference to a broad product or industry grouping necessarily renders that request for establishment inconsistent with Article 6.2 of the DSU. We believe that the Appellate Body was of a similar opinion in LAN Equipment, where it shared the US concern that:

‘if the EC arguments on specificity of product definition are accepted, there will inevitably be long, drawn-out procedural battles at the early stage of the panel process in every proceeding. The parties will contest every product definition, and the defending party in each case will seek to exclude all products that the complaining parties may have identified by grouping, but not spelled out in ’sufficient’ detail.’(330)

Although the Appellate Body’s remarks were made in the context of a reference to a broad product grouping in the complaining party’s request for establishment, we can see no basis for not adopting a similar approach when the request for establishment refers to a broad industry sector, such as the ‘civil aircraft industry’. If a complaining party believes that a measure affects a broad industry sector, in our view that complaining party should be entitled to challenge that measure insofar as it affects the totality of the industry concerned, without having to spell out the individual components of that industry, and without running afoul of Article 6.2 of the DSU.”(331)

Availability of public information regarding measure

234. In EC and certain member States — Large Civil Aircraft, the Appellate Body explained that an assessment of whether a complaining party has identified the specific measures at issue may depend on the particular context in which those measures exist and operate. In that case, the Appellate Body focused in particular on whether information regarding several programmes was readily available in the public domain at the time of the panel request:

“Whether a measure can be identified in conformity with the requirements of Article 6.2 may, as is the case here, depend on the extent to which that measure is specified in the public domain. We do not understand Article 6.2 to impose a standard that renders it more difficult to challenge a measure simply because information in the public domain concerning that measure is of a general character. Additionally, the lack of specification in the public domain should not shield this particular measure from challenge simply because greater detail in the form of, for example, an identifiable programme name was publicly available in respect of the other measures specified in sections (6)(b), (6) (c), and (6)(d). We note that, even after reviewing the Panel record in this case, and questioning the participants at the oral hearing, it is still not clear to us what additional degree of specificity could reasonably have been expected regarding the identification of R&TD funding allocated through the French Government’s budgetary process. Taking into account the public information that existed regarding the French R&TD funding at the time of the United States’ panel request, we consider that the description set out in section (6)(e) was sufficiently precise to establish that the French R&TD funding challenged by the United States was within the Panel’s terms of reference.”(332)

(iii) “specific”

235. As regards the specificity requirement, the Appellate Body in EC — Selected Customs Matters emphasized the purpose of the word “specific” in Article 6.2 of the DSU before noting that a complainant could make statements in the panel request that clarify its request, in which case, the Panel is entitled to take those statements into account:

“The word “specific” in Article 6.2 establishes a specificity requirement regarding the identification of the measures that serves the due process objective of notifying the parties and the third parties of the measure(s) that constitute the object of the complaint. “(333)

236. In EC — Bananas III, the Appellate Body considered that the adequacy of a panel request is a matter that could be dealt with early on in a case:

“[T]his kind of issue could be decided early in panel proceedings, without causing prejudice or unfairness to any party or third party, if panels had detailed, standard working procedures that allowed, inter alia, for preliminary rulings.”(334)

237. In EC — Trademarks and Geographical Indications (Australia),(335) the European Communities argued that Australia’s reference to Regulation 2081/92 in its panel request was not specific enough to allow it to understand which specific aspects of the Regulation Australia intended to raise as an issue.(336) The Panel, in a preliminary ruling, rejected this argument finding that requests for establishment do not require the “specific aspects” of the “specific measures” to be identified. In this regard, the Panel stated:

“The Panel considers the ordinary meaning of the terms of the text in Article 6.2 of the DSU, read in their context and
in the light of the object and purpose of the provision, to be quite clear. They require that a request for establishment of a panel ‘identify the specific measures at issue’. They do not require the identification of the ’specific aspects’ of these ’specific measures’.”(337)

238. Also, in EC — Trademarks and Geographical Indications (Australia), the Panel found, in a preliminary ruling, that Australia’s reference to “related implementing and enforcement measures” did not lack certainty as it expressly referred to measures implementing and enforcing Regulation (EEC) No. 2081/92. In this regard, the Panel stated:

“All of the Regulation’s implementing and enforcement measures form a group of specific measures which, although they may be a large group, are identified by Australia’s request for establishment of a panel”.(338)

239. In EC — Approval and Marketing of Biotech Products, the European Communities, in a preliminary ruling request, complained that none of the three panel requests clearly distinguished between the alleged suspension and the failure to act and that therefore it was in the dark as to the meaning of these requests.(339) The Panel found that it was unclear whether the United States could have identified the measure more clearly than it had, but that even if it could, that its request sufficiently identified the specific measure being challenged when read together with the introductory paragraph.(340) It also found that neither Canada nor Argentina’s panel requests failed to meet the requirements of Article 6.2 in this regard.(341) With regards to the United States’ panel request, the Panel stated:

“In the present case, it is unclear whether the United States could have identified the alleged de facto moratorium with more specificity than it has. …

Even assuming that the United States could have provided further details on the alleged de facto moratorium, we consider that the description of the first measure covered in the panel request, when read together with the introductory paragraph, adequately identifies the specific measure that is being challenged. In our view, the information provided is sufficient to meet the due process objective inherent in Article 6.2 of the DSU”.(342)

240. In EC and certain member States — Large Civil Aircraft, the European Communities challenged a number of measures as being outside the Panel’s terms of reference. The challenge was based on the grounds that, in its request for the establishment of a panel, the United States had described these measures in an overly broad, ambiguous or overly inclusive manner. According to the EC, the US had thereby failed to comply with the basic obligation under Article 6.2 of the DSU to identify the “specific measures at issue” in its request for the establishment of a panel.(343) In rejecting the EC’s preliminary ruling request, the Panel noted that compliance with the requirements of Article 6.2 must be determined after the consideration of the panel request as a whole and in light of attendant circumstances, giving examples, in a footnote, of what may be considered to be “attendant circumstances”. The Panel stated:

“A panel’s terms of reference are based on the request for establishment of a panel. We recall that, when faced with an issue relating to the scope of its terms of reference, a panel is required to scrutinize carefully the request for establishment of a panel to ensure its compliance with both the
letter and spirit of Article 6.2 of the DSU.(344) …

[C]ompliance with the requirements of Article 6.2 must be determined on the merits of each case, after a consideration of the panel request as a whole, and in light of attendant circumstances. Moreover, such compliance must be determined on the merits of each case, after a consideration of the panel request as a whole, and in light of attendant circumstances.(345)

…

In the Panel’s view, Section (6) (e) of the panel request, considered as a whole and in light of attendant circumstances, identifies the measures at issue in a manner sufficient to present the problem clearly.”(346)

(iv) “measures at issue”

Nexus between “measure” and “Member”

General

241. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body referred to Article 3.3 of the DSU when defining which type of measures can be the subject of dispute settlement proceedings. The Appellate Body emphasized the nexus existing between the “measure” and a “Member” taking such measure:

“Article 3.3 of the DSU refers to ’situations in which a Member considers that any benefits accruing to it directly or indirectly under the covered agreements are being impaired by measures taken by another Member’. (emphasis added) This phrase identifies the relevant nexus, for purposes of dispute settlement proceedings, between the ‘measure’ and a ‘Member’.(347)

Any act or omission attributable to a Member

242. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body clarified that “[i]n principle, any act or omission attributable to a WTO Member can be a measure of that Member for purposes of dispute settlement proceedings.”(348)

243. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body also indicated that those “acts or omissions that are so attributable are, in the usual case, the acts or omissions of the organs of the state, including those of the executive branch.”(349),(350)

244. In EC — Selected Customs Matters, the Appellate Body, citing its finding in US — Corrosion-Resistant Steel Sunset Review, emphasized that a measure may be any act or omission attributable to a WTO Member:

“In our view, a complainant is entitled to include in its panel request an allegation of inconsistency with a covered agreement of any measure that may be submitted to WTO dispute settlement. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body provided guidance on the types of measures that may be the subject of dispute settlement. Relying on,
inter alia, Article 3.3 of the DSU, which refers to ’situations in which a Member considers that any benefits accruing to it directly or indirectly under the covered agreements are being impaired by measures taken by another Member’, the Appellate Body stated that ‘[i]n principle, any act or omission attributable to a WTO Member can be a measure of that Member for purposes of dispute settlement proceedings.’(351) As long as the specificity requirements of Article 6.2 are met, we see no reason why a Member should be precluded from setting out in a panel request ‘any act or omission’ attributable to another Member as the measure at issue.”(352)

245. In EC — Approval and Marketing of Biotech Products, the Panel ruled that an EC moratorium was the measure at issue on the basis of three different elements:

“[T]he Panel considers that the measure which is being challenged by the Complaining Parties is the alleged EC moratorium on the approval of biotech products. The essential elements characterizing the alleged EC moratorium, which the Complaining Parties say was in effect between October 1998 and the date of establishment of this Panel (i.e., 29 August 2003), are the following: (a) It was not adopted through a formal EC rule- or decision-making process, but it nonetheless constitutes a measure attributable to the European Communities, (b) It was applicable to all applications for approval of biotech products which were pending or newly submitted during the relevant time period, (c) It involved the effective suspension by the European Communities of final approval decisions with regard to the applications mentioned in the preceding sub-paragraph.”(353)

Challenging legislation taken by a customs union

246. The Panel in Turkey — Textiles considered, inter alia, whether measures involving quantitative restrictions on imports from India should be properly regarded as measures imposed by Turkey or rather as measures taken collectively by the customs union between the European Communities and Turkey. In its analysis, the Panel made the following statement:

“We also note that the measures are applied by Turkey and that they are mandatory, i.e. they leave no discretion to Turkish authorities but to enforce the measure. It is customary practice of GATT/WTO dispute settlement procedures to address applied measures. In addition, previous adopted GATT panels have always considered that mandatory legislation of a Member, even if not yet in force or not applied(354), can be challenged by another WTO Member.”(355)

Private action as a “measure”

247. The Panel in Japan — Film characterized the problem of classifying private action as a governmental “measure” in the following terms:

“As the WTO Agreement is an international agreement, in respect of which only national governments and separate customs territories are directly subject to obligations, it follows by implication that the term measure in
Article XXIII:1(b) and Article 26.1 of the DSU, as elsewhere in the WTO Agreement, refers only to policies or actions of governments, not those of private parties. But while this ‘truth’ may not be open to question, there have been a number of trade disputes in relation to which panels have been faced with making sometimes difficult judgments as to the extent to which what appear on their face to be private actions may nonetheless be attributable to a government because of some governmental connection to or endorsement of those actions.”(356)

248. Within the context referred to in
paragraph 247 above, the Panel in Japan — Film had to determine whether an “administrative guidance” in Japan amounted to a governmental “measure”. The Panel began by considering the ordinary meaning of the term “measure”:

“The ordinary meaning of measure as it is used in
Article XXIII:1(b) certainly encompasses a law or regulation enacted by a government. But in our view, it is broader than that and includes other governmental actions short of legally enforceable enactments.(357) At the same time, it is also true that not every utterance by a government official or study prepared by a non-governmental body at the request of the government or with some degree of government support can be viewed as a measure of a Member government.

In Japan, it is accepted that the government sometimes acts through what is referred to as administrative guidance. In such a case, the company receiving guidance from the Government of Japan may not be legally bound to act in accordance with it, but compliance may be expected in light of the power of the government and a system of government incentives and disincentives arising from the wide array of government activities and involvement in the Japanese economy. As noted by the parties, administrative guidance in Japan takes various forms. Japan, for example, refers to what it calls ‘regulatory administrative guidance’, which it concedes effectively substitutes for formal government action.(358) It also refers to promotional administrative guidance, where companies are urged to do things that are in their interest to do in any event. In Japan’s view, this sort of guidance should not be assimilated to a measure in the sense of
Article XXIII:1(b). For our purposes, these categories inform, but do not determine the issue before us. Thus, it is not useful for us to try to place specific instances of administrative guidance into one general category or another. It will be necessary for us, as it has been for GATT panels in the past, to examine each alleged ‘measure’ to see whether it has the particular attributes required of a measure for
Article XXIII:1(b) purposes.”(359)

249. The Panel in Japan — Film subsequently reviewed GATT practice with respect to this subject-matter and defined “sufficient government involvement” as the decisive criterion for whether a private action may be deemed to be a governmental “measure”:

“[P]ast GATT cases demonstrate that the fact that an action is taken by private parties does not rule out the possibility that it may be deemed to be governmental if there is sufficient government involvement with it. It is difficult to establish bright-line rules in this regard, however. Thus, that possibility will need to be examined on a case-by-case basis.”(360)

250. In Canada — Autos, the Panel examined the GATT-consistency of commitments undertaken by Canadian motor vehicle manufacturers in their letters addressed to the Canadian Government to increase Canadian value added in the production of motor vehicles. Referring to the GATT Panel Reports on Canada — FIRA and EEC — Parts and Components,(361) the Panel analysed whether the action of private parties is subject to Article III:4 as follows:

“[T]o qualify a private action as a ‘requirement’ within the meaning of Article III:4 means that in relation to that action a Member is bound by an international obligation, namely to provide no less favourable treatment to imported products than to domestic products.

A determination of whether private action amounts to a ‘requirement’ under Article III:4 must therefore necessarily rest on a finding that there is a nexus between that action and the action of a government such that the government must be held responsible for that action. We do not believe that such a nexus can exist only if a government makes undertakings of private parties legally enforceable, as in the situation considered by the Panel on Canada-FIRA, or if a government conditions the grant of an advantage on undertakings made by private parties, as in the situation considered by the Panel on EEC — Parts and Components. We note in this respect that the word ‘requirement’ has been defined to mean ‘1. The action of requiring something; a request. 2. A thing required or needed, a want, a need. Also the action or an instance of needing or wanting something. 3. Something called for or demanded; a condition which must be complied with.’ The word ‘requirements’ in its ordinary meaning and in light of its context in Article III:4 clearly implies government action involving a demand, request or the imposition of a condition but in our view this term does not carry a particular connotation with respect to the legal form in which such government action is taken. In this respect, we consider that, in applying the concept of ‘requirements’ in Article III:4 to situations involving actions by private parties, it is necessary to take into account that there is a broad variety of forms of government of action that can be effective in influencing the conduct of private parties.”(362) (footnotes omitted)

251. In Argentina — Hides and Leather, the European Communities claimed that an Argentine resolution, which authorized the presence of representatives of the Argentine domestic leather tanning industry during customs clearance of exports of hides and leather, operated as a de facto export restriction in violation of Article XI:1 of GATT 1994. The European Communities admitted that the Argentine measure did not expressly limit exports; however, the European Communities claimed that the presence of the industry associations during the export clearance process allowed access to exporters’ confidential business information, which was subsequently used — by virtue of the existence of a tanners cartel in the Argentine market — to exercise pressure on hides and leather producers not to export their products. The Panel ultimately rejected the European Communities’ arguments on the basis of a lack of evidence:

“We agree with the view expressed by the panel in Japan — Film. However, we do not think that it follows either from that panel’s statement or from the text or context of Article XI:1 that Members are under an obligation to exclude any possibility that governmental measures may enable private parties, directly or indirectly, to restrict trade, where those measures themselves are not trade-restrictive.(363)

…

The European Communities acknowledges that the representatives of the tanning industry do not have the de jure ability to halt bovine hide exports. However, according to the European Communities, having such representatives present during the export clearance process in itself restricts exports in the context of the facts of the case. The European Communities has advanced several reasons why this might be so. The European Communities refers to the GATT dispute of Japan — Semiconductors for the proposition that there can be export restrictions without overt actions by the government to physically stop exports. According to the European Communities, in that case it was sufficient for the government to set up a system where peer pressure was used to discourage exports. …

…

[I]t is possible that a government could implement a measure which operated to restrict exports because of its interaction with a private cartel. Other points would need to be argued and proved (such as whether there was or needed to be knowledge of the cartel practices on the part of the government) or, to put it as mentioned above, it would need to be established that the actions are properly attributed to the Argentinean government under the rules of state responsibility”,(364)

252. In Argentina — Hides and Leather, the Panel observed that “as an additional matter, the European Communities would also need to prove that this private action was attributable to the Argentinean government under the doctrine of state responsibility, but because the initial factual point has not been established, we do not need to reach that issue here”.(365)

Nexus between “measure” and “alleged impairment”

253. In US — Gambling, the Appellate Body identified two elements in the concept of measures that can be subject to dispute settlement: (i) a nexus must exist between the Member and the measure and (ii) the measure must be the source of the alleged impairment:

“The DSU provides for the ‘prompt settlement’ of situations where Members consider that their benefits under the covered agreements ‘are being impaired by measures taken by another Member’.(366) Two elements of this reference to ‘measures’ that may be the subject of dispute settlement are relevant. First, as the Appellate Body has stated, a ‘nexus’ must exist between the responding Member and the ‘measure’, such that the ‘measure’ — whether an act or omission — is ‘attributable’ to that Member.(367) Secondly, the ‘measure’ must be the source of the alleged impairment, which is in turn the effect resulting from the existence or operation of the ‘measure’.”(368)

254. The Appellate Body in US — Gambling then considered whether an alleged “total prohibition” on the cross-border supply of gambling and betting services constituted a measure that could be challenged under the GATS. In upholding the Panel’s finding that it was not a measure, the Appellate Body stressed the importance of distinguishing between the measure and its effect:

“[Consultations at the outset of a dispute are based on:

… measures affecting the operation of any covered agreement taken within the territory [of the responding Member].(369)

This provision contemplates that ‘measures’ themselves will ‘affect’ the operation of a covered agreement. Finally, we note that this distinction between measures and their effects is also evident in the scope of the application of the GATS, namely, to ‘measures by Members affecting trade in services’.(370)

We are therefore of the view that the DSU and the GATS focus on ‘measures’ as the subject of challenge in WTO dispute settlement. To the extent that a Member’s complaint centers on the effects of an action taken by another
Member, that complaint must nevertheless be brought as a challenge to the measure that is the source of the alleged effects.

…

We note also that, if the ‘total prohibition’ were a measure, a complaining party could fulfil its obligation to identify the ’specific measure at issue’ pursuant to Article 6.2 of the DSU, merely be explicitly mentioning the ‘prohibition’. Yet, without knowing the precise source of the ‘prohibition’, the responding party would not be in a position to prepare adequately its defence, particularly where, as here, it is alleged that numerous federal and state laws underlie the ‘total prohibition’.

Therefore, we conclude that, without demonstrating the source of the prohibition, a complaining party may not challenge a ‘total prohibition’ as a ‘measure’ per se, in dispute settlement proceedings under the GATS.”(371)

Temporal scope of “measures at issue”

General

255. In EC — Selected Customs Matters, the Appellate Body took issue on the temporal limitations of the Panel’s terms of reference after the European Communities challenged the Panel’s interpretation in respect of “steps and acts of administration that predate or post-date the establishment of a panel”.(372) The Appellate Body began by discussing the exceptions to the general rule that the measures in a panel’s terms of reference must be measures in existence at the time of the establishment of the panel:

The term ’specific measures at issue’ in Article 6.2 suggests that, as a general rule, the measures included in a panel’s terms of reference must be measures that are in existence at the time of the establishment of the panel.(373) (footnote omitted)

This general rule, however, is qualified by at least two exceptions. First, in Chile — Price Band System, the Appellate Body held that a panel has the authority to examine a legal instrument enacted after the establishment of the panel
that amends a measure identified in the panel request, provided that the amendment does not change the essence of the identified measure.(374) Secondly, in US — Upland Cotton, the Appellate Body held that panels are allowed to examine a measure ‘whose legislative basis has expired, but whose effects are alleged to be impairing the benefits accruing to the requesting Member under a covered agreement’ at the time of the establishment of the panel.(375) The summary presented by the Panel in paragraph 7.36 of the Panel Report is in line with what the Appellate Body said in EC — Chicken Cuts, Chile — Price Band System, and US — Upland Cotton(376) Therefore, we see no error in the Panel’s legal interpretation contained in paragraph 7.36 of the Panel Report.”(377)

256. The Appellate Body, in EC — Selected Customs Matters, with respect to the temporal limitations of the Panel’s term of reference, emphasized the difference between the measure at issue and the pieces of evidence in support of the claims, which can be invoked after the establishment of the Panel:

“[I]t is important to distinguish between, on the one hand, the measures at issue and, on the other hand, acts of administration that have been presented as evidence to substantiate the claim that the measures at issue are administered in a manner inconsistent with
Article X:3(a) of the GATT 1994. The Panel failed to make the distinction between measures and pieces of evidence. While there are temporal limitations on the measures that may be within a panel’s terms of reference, such limitations do not apply in the same way to evidence. Evidence in support of a claim challenging measures that are within a panel’s terms of reference may predate or post-date the establishment of the panel. A panel is not precluded from assessing a piece of evidence for the mere reason that it pre-dates or post-dates its establishment.(378) In this case, the United States was not precluded from presenting evidence relating to acts of administration before and after the date of Panel establishment. A panel enjoys a certain discretion to determine the relevance and probative value of a piece of evidence that pre-dates or post-dates its establishment.”(379)

257. In US — Zeroing (Article 21.5 — Japan) the Appellate Body stated that Article 6.2 does not set out an express temporal condition or limitation on the measures that can be identified in a panel request:

“We recall that Article 6.2 of the DSU provides that the request for the establishment of a panel ’shall indicate whether consultations were held, identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly.’ Apart from the reference in the present tense to the fact that the complainant must identify the measures ‘at issue’, Article 6.2 does not set out an express temporal condition or limitation on the measures that can be identified in a panel request. Indeed, in US — Upland Cotton, where the issue was raised in the context of measures that had expired prior to the panel proceedings, the Appellate Body explained that ‘nothing inherent in the term ‘at issue’ sheds light on whether measures at issue must be currently in force, or whether they may be measures whose legislative basis has expired’.(380) In EC — Chicken Cuts, the Appellate Body stated that ‘[t]he term ’specific measures at issue’ in Article 6.2 suggests that, as a general rule, the measures included in a panel’s terms of reference must be measures that are in existence at the time of the establishment of the panel.’(381) Nevertheless, the Appellate Body also stated in that case that “measures enacted subsequent to the establishment of the panel may, in certain limited circumstances, fall within a panel’s terms of reference”.(382)

Amendment to a measure enacted after establishment of Panel

258. In Chile — Price Band System, the Appellate Body considered that the amendment of a measure enacted after the Panel had been established may be considered as within the Panel’s terms of reference.(383) The Appellate Body determined that “the amendment at issue should be considered as part of the measure at issue since it clarified the legislation that established the measure at issue and did not change the original measure into something different than what was in force before the amendment”.(384) The Appellate Body explained that:

“[I]f the terms of reference in a dispute are broad enough to include amendments to a measure — as they are in this case — and if it is necessary to consider an amendment in order to secure a positive solution to the dispute — as it is here — then it is appropriate to consider the measures as amended in coming to a decision in a dispute.”(385)

259. In Colombia — Ports of Entry, the Panel agreed with the Appellate Body’s rationale in Chile — Price Band System and stated that “this determination was considered consistent with earlier jurisprudence(386) and was found to be consistent with the object and purpose of the WTO dispute settlement system, as set forth in Article 3.7 of the DSU.”(387) The Panel stated that:

“The Panel agrees with the Appellate Body’s rationale. In the dispute before the Panel, Colombia enacted the aforementioned Resolutions 11414, 11412 and 11415 after the Panel was established. In the Panel’s view, the terms of the Panama’s request for establishment include the relevant amendments and replacements. The Panel therefore finds that Resolutions 11414, 11412 and 11415 are properly part of the measure at issue and within the Panel’s terms of reference. In the Panel’s view, a failure to consider these additional resolutions would inhibit the Panel from securing a positive solution to the dispute.”(388)

260. In EC — Fasteners (China), the Panel found that a Council Regulation repealing and replacing the earlier Council Regulation identified in China’s panel request fell within its terms of reference. The Panel reviewed the minor textual differences between the two Regulations, and then emphasized that the later Regulation did not come into effect until after China submitted its panel request and this Panel was established. The Panel stated that:

“We note that one of the objectives of Article 6.2 of the DSU is to ensure the due process rights of the respondent in dispute settlement proceedings. It is clear that those rights would be undermined where the text of the panel request does not sufficiently inform a responding Member of the measure at issue and the nature of the claims raised by the complaining Member. This, however, clearly is not the case in the present proceedings. China raised certain claims in connection with a specific provision of Council Regulation No. 384/96 in both its request for consultations and its panel request. While it is true that this Regulation was subsequently repealed, it was immediately replaced by Council Regulation No. 1225/2009 which contains, in almost identical terms, and in identical substance, the same provision as was specifically identified in China’s panel request. This repeal and replacement took place after China submitted its panel request, and after this Panel was established. To require China in such circumstances to restart the dispute settlement process, potentially requiring a new request for consultations,(389) would defeat the purpose of the DSU to provide for the “prompt settlement of situations in which a Member considers that benefits accruing to it” under a covered Agreement are being impaired by another Member’s measure, as provided for in Article 3.3 of the DSU. Thus, we consider the European Union’s objection to be formalistic, rather than substantive. In the circumstances of this dispute, the due process rights of the European Union cannot be considered to have been undermined by allowing the dispute to go forward challenging the replacement measure rather than the measure named in the panel request. Indeed, to sustain the European Union’s objection would not be consistent with the effective functioning of the WTO dispute settlement system, as it might lead to inappropriate legal manoeuvres to avoid dispute settlement, inconsistent with the obligation of Members to engage in dispute settlement “in good faith in an effort to resolve the dispute”.(390) We therefore consider that Council Regulation No. 1225/2009 is properly before us and will base our findings and recommendations on China’s “as such” claims on the relevant parts of that Regulation.”(391)

Prospective measures

261. In US — Continued Zeroing, the Panel found that “Article 6.2 of the DSU, in principle, does not allow a panel to make findings regarding measures that do not exist as of the date of the panel’s establishment unless they come into existence during the panel’s proceedings”.(392) The Appellate Body disagreed with the Panel’s view, noting that it is not uncommon for remedies sought in WTO dispute settlement to have prospective effect:

“The Panel appeared to consider that, because the remedy sought by the European Communities was prospective in nature, the ‘measures’ with respect to which such remedy was sought could not be regarded as specifically identified in the panel request. In our view, the remedy sought by the complainant may provide further confirmation as to the measure that is the subject of the complaint. As discussed, we are of the view that it can be discerned from the panel request, read as a whole, that the measures at issue consist of an ongoing conduct, that is, the use of the zeroing methodology in successive proceedings in each of the 18 cases whereby anti-dumping duties are maintained. The prospective nature of the remedy sought by the European Communities is congruent with the fact that the measures at issue are alleged to be ongoing, with prospective application and a life potentially stretching into the future. Moreover, it is not uncommon for remedies sought in WTO dispute settlement to have prospective effect, such as a finding against laws or regulations, as such, or a subsidy programme with regularly recurring payments.”(393)

262. In EC — IT Products, the complainants used the phrase “any amendments, or extensions and any related or implementing measures” in their joint Panel request. The Panel addressed the issue of whether measures that came into force after the establishment could properly be considered to have been included in the part of the panel’s terms of reference. In addressing this issue, the Panel noted that while the mere incantation of the phrase “any amendments, or extensions and any related or implementing measures” in a panel request does not permit Members to bring in measures that were clearly not contemplated in the Panel request, the phrase is a useful tool to include certain amendments and prevent the possibility that the procedural requirements of WTO dispute settlement result in a situation where measures could completely evade review. The Panel stated:

“We note that the complainants incorporated the phrase ‘any amendments, or extensions and any related or implementing measures’ into their joint Panel request. We recall that the complainants, in the joint Panel request, identifies as the specific measure at issue Council Regulation No. 2658/87, ‘as amended’ (emphasis added). While we do not consider that the mere incantation of the phrase ‘any amendments, or extensions and any related or implementing measures’ in a panel request will permit Members to bring in measures that were clearly not contemplated in the Panel request, it may be used to refer to measures
not yet in force or concluded on the date of the panel request, or measures that the complainants were not yet aware of, such as government procedures
not yet published that have the same essential effect as the measures that were specifically identified. This is to prevent the possibility that the procedural requirements of WTO dispute settlement result in a situation where measures could completely evade review.(394)This is especially true with the type of measures we have before us, which are amended annually.”(395),(396)

Type of measure

General

263. In Japan — Agricultural Products II, the Appellate Body interpreted the term “measure” within the meaning of
Annex B of the SPS Agreement. According to its terms,
Annex B applies to all “measures” and lists “laws, decrees and ordinances” as three examples of such measures. The Appellate Body found that the list in
Annex B was not exhaustive in nature and held that the term “measure” also included “other instruments which are applicable generally and are similar in character to the instruments explicitly referred to”. In the case before it, the Appellate Body found that the Japanese “varietal testing requirement” was a “measure” within the meaning of
Annex B of the SPS Agreement.(397)

264. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body clarified in a footnote that the scope of “laws, regulations and administrative procedures” cannot be determined by reference to how they are labelled in the Member’s domestic law:

“We observe that the scope of each element in the phrase “laws, regulations and administrative procedures” must be determined for purposes of WTO law and not simply by reference to the label given to various instruments under the domestic law of each WTO Member. This determination must be based on the content and substance of the instrument, and not merely on its form or nomenclature. Otherwise, the obligations set forth in Article 18.4 [of the Anti-Dumping Agreement] would vary from Member to Member depending on each Member’s domestic law and practice.”(398)

Challenging a system as a whole

265. In EC — Selected Customs Matters, the Appellate Body noted that the DSU permits a Member to challenge a responding Member’s system — cumulatively containing a vast number of provisions — as a whole:

“[W]e agree with the Panel that ‘there is nothing in the DSU nor in the other WTO agreements that would prevent a complaining Member from challenging a responding Member’s system as a whole or overall.’(399) We also agree with the Panel that a challenge that a system ‘as a whole or overall’ is WTO-inconsistent must be presented in a manner that meets the two distinct requirements in Article 6.2 of the DSU.…
We also recognize, as the Panel did, that, in this case, the legal instruments referred to by the United States in the panel request, ‘cumulatively, contain’ a vast number of provisions that relate to a variety of customs areas and that “entail administration in … diverse ways’. However, the essence of the United States’ claim was not the administration or application of individual provisions of these legal instruments, but the absence of any mechanism or procedure at the European Communities level to reconcile divergences in the administration of these instruments by the member States of the European Communities. Therefore, we do not think that the due process rights of the European Communities were infringed merely because the claim of the United States related to the manner of administration of the European Communities customs law as a whole or overall. (…) [T]he claim of the United States in this dispute is not an ‘as such’ claim, in the sense that it does not challenge the substantive content of the measures at issue. (…) [T]he United States’ contention on the ‘design and structure’ of the European Communities’ system of customs administration was made as an argument to substantiate its ‘as a whole’ challenge set out in the panel request”(400)

Independent operational status test

266. In US — Export Restraints, Canada argued that each of the elements cited in its request for establishment of a panel (a US Statute, a Statement of Administrative Action, a Preamble and a US practice) individually constituted a measure and that “taken together” as well, these elements constituted a measure.(401) In its analysis of these measures, the Panel came up with the independent operational status test:

“In considering whether any or all of the measures individually can give rise to a violation of WTO obligations, the central question that must be answered is whether each measure operates in some concrete way in its own right. By this we mean that each measure would have to constitute an instrument with a functional life of its own, i.e., that it would have to do something concrete, independently of any other instruments, for it to be able to give rise independently to a violation of WTO obligations. To determine whether each measure is operational on its own, we consider the status of each under US law.”(402)

Can a “practice” be challenged as a “measure”?

267. In US — Export Restraints, Canada claimed that the United States “practice” of treating export restraints as meeting the “financial contribution” requirement of Article 1.1(a)(1)(iv) of the SCM Agreement was a measure and could be challenged as such. Canada defined the United States’ “practice” as “an institutional commitment to follow declared interpretations or methodologies that is reflected in cumulative determinations” and claimed that this “practice” has an “operational existence in and of itself’.(403) The Panel considered whether the alleged United States practice required the United States’ authorities to treat export restraints in a certain way and therefore had “independent operational status”. The Panel, which concluded that there was no measure in the form of a United States practice, indicated:

“[W]hile Canada may be right that under US law, ‘practice must normally be followed, and those affected by US [CVD] law … therefore have reason to expect that it will be’,(404) past practice can be departed from as long as a reasoned explanation, which prevents such practice from achieving independent operational status in the sense of doing something or requiring some particular action. The argument that expectations are created on the part of foreign governments, exporters, consumers, and petitioners as a result of any particular practice that the DOC ‘normally’ follows would not be sufficient to accord such a practice an independent operational existence. Nor do we see how the DOC’s references in its determinations to its practice gives ‘legal effect to that ‘practice’ as determinative of the interpretations and methodologies it applies’.(405) US ‘practice’ therefore does not appear to have independent operational status such that it could independently give rise to a WTO violation as alleged by Canada.”(406)

268. In US — Steel Plate, the United States, in reference to the Panel Report in US — Export Restraints (see
paragraph 267 above), argued that the United States’ “practice” (in this case its practice as regards total facts available)(407) could not be the subject of a claim because it did not have “independent operational status” and therefore it was not a “measure”.(408) India, on the contrary, claimed that a “practice” becomes a “measure” through repeated similar responses to the same situation.(409) The Panel concluded:

“That a particular response to a particular set of circumstances has been repeated, and may be predicted to be repeated in the future, does not, in our view transform it into a measure. Such a conclusion would leave the question of what is a measure vague and subject to dispute itself, which we consider an unacceptable outcome. Moreover, we do not consider that merely by repetition, a Member becomes obligated to follow its past practice…(410)

[T]he challenged practice in this case is, in our view, no different from that considered in the US — Export Restraints case. It can be departed from so long as a reasoned explanation is given. It therefore lacks independent operational status, as it cannot require USDOC to do something, or refrain from doing something.”(411)

269. In US — Oil Country Tubular Goods Sunset Reviews, Argentina brought conditional appeals with respect to: (1)
Article X:3(a) of the GATT 1994; and (2) the “practice” of the USDOC regarding its likelihood determinations in sunset reviews. The Appellate Body declined to make a finding on whether a “practice” can be challenged as a “measure”, ruling instead that the Panel’s record of the dispute did not allow the Appellate Body to complete its analysis of Argentina’s conditional appeal with respect to the “practice” of the USDOC regarding the likelihood determination in sunset reviews.(412)

270. In US — Gambling, in the course of examining what measures Antigua was challenging in that dispute, the Panel relied on certain Appellate Body decisions to support its view that “practice” can be considered as an autonomous measure that can be challenged in and of itself. The Panel then observed that certain acts identified by Antigua could constitute “practices”, as that term had been understood by the panel in US — Corrosion Resistant Sunset Steel Review. However, based on Antigua’s clarification in its comments to the United States’ request for preliminary rulings, the Panel concluded that Antigua was not challenging any practice as such.(413) The Appellate Body noted that the Panel’s statement on “practice” was a mere obiter dictum and found no need to rule on it. The Appellate Body however disagreed with the Panel’s understanding of the Appellate Body’s jurisprudence and reaffirmed that “[t]he Appellate Body has not, to date, pronounced upon the issue of whether ‘practice’ may be challenged, as such, as a ‘measure’ in WTO dispute settlement.”(414)

271. In EC and certain member States — Large Civil Aircraft, the United States challenged not only individual instances of launch aid / member State financing (LA/MSF), but also the LA/MSF “programme” as a whole. The Panel agreed with the European Communities that the United States failed to demonstrate the existence of an unwritten LA/MSF “programme”. On appeal, the Appellate Body found that the alleged measure was not actually identified in the panel request, and therefore fell outside of the Panel’s terms of reference. However, the Appellate Body observed that, as a general proposition, it did not exclude the possibility that concerted action or practice could be susceptible to challenge in WTO dispute settlement:

“When a challenge is brought against an unwritten measure, the very existence and the precise contours of the alleged measure may be uncertain. We would therefore expect complaining parties to identify such measures in their panel requests as clearly as possible. We would also expect that complaining parties state unambiguously the legal basis for the allegation that those measures are not consistent with particular provisions of the covered agreements. Panel requests should give respondents and third parties sufficient notice of the specific measures that the complainant intends to challenge in WTO dispute settlement proceedings.

…

The Appellate Body has addressed, in several cases, the scope of “measures” that may properly form the subject of WTO dispute settlement. In US — Corrosion-Resistant
Steel Sunset Review, the Appellate Body found that, “{i}n principle, any act or omission attributable to a WTO Member can be a measure of that Member for purposes of dispute settlement proceedings.”(415) The scope of measures that can be challenged in WTO dispute settlement is therefore broad. As a general proposition, we do not exclude the possibility that concerted action or practice could be susceptible to challenge in WTO dispute settlement. Nor do we consider that a complainant would necessarily be required to demonstrate the existence of a rule or norm of general and prospective application in order to show that such a measure exists. In the present case, however, we are unable to discern in the United States’ panel request a challenge to an alleged LA/ MSF Programme as a specific measure “separate from the individual instances of {LA/MSF}”, and, as noted, a complainant’s subsequent submissions during panel proceedings cannot cure such a defect in a panel request.”(416),(417)

De jure versus de facto governmental measure

272. In EC — Approval and Marketing of Biotech Products, the Panel, pointing at the requirement to properly identify the measures at issue, made a distinction between formal (de jure) governmental measures and informal (de facto) governmental measures:

“[T]he panel in Canada — Wheat Exports and Grain imports distinguished between measures of general application and particular actions taken pursuant to such measures.(418) We consider that another appropriate distinction is that between formal (de iure) governmental measures and informal (de facto) governmental measures.(419) In our view, the informal nature of a governmental measure may affect the degree of precision with which such a measure can be set out in a panel request. Notably, it will often not be possible to identify informal measures by their name, date of adoption and/ or legal status.”(420)

Application of tariffs as a measure

273. In EC — Computer Equipment, the Appellate Body opined that not only measures of general application, but also the application of tariffs by customs authorities were “measures” within the meaning of Article 6.2. The Appellate Body agreed that the request for establishment of the Panel did identify the measures properly:

“We consider that ‘measures’ within the meaning of Article 6.2 of the DSU) are not only measures of general application, i.e., normative rules, but also can be the application of tariffs by customs authorities. Since the request for the establishment of a panel explicitly refers to the application of tariffs on LAN equipment and PCs with multimedia capability by customs authorities in the European Communities, we agree with the Panel that the measures in dispute were properly identified in accordance with the requirements of Article 6.2 of the DSU).”(421)

275. In US — Tuna II (Mexico), the Panel decided to consider several measures jointly in its analysis of Mexico’s claims, and make findings based on their combined operation, rather than on the basis of each individual measure separately. In the course of its analysis, the Panel took into account prior jurisprudence on this issue. The Panel began by noting that:

“In addressing this issue, we first note that it has not been suggested in these proceedings that any of these legal instruments taken in isolation would not constitute an “act or omission of the organs of the state” attributable to the United States. We further note that the DPCIA and the implementing regulations constitute legislative or regulatory acts of the federal authorities, while the court ruling constitutes an act of the judicial branch. Each of these normative instruments is a priori capable of constituting a measure attributable to the United States, which may be challenged in dispute settlement proceedings under the DSU.”(422)

276. After reviewing how the various instruments cited by Mexico function and relate to each other, the Panel concluded that:

“To summarize, together and collectively, the various provisions in the different legal instruments identified by Mexico, including
the Hogarth ruling, set out the terms of the US “dolphin-safe” labelling scheme, as currently applied by the United States. We also note that the United States does not object to Mexico’s request to consider the various instruments together and that it has articulated its defence in these proceedings on the basis of the measures taken together. In light of these elements, we see merit in considering these closely related instruments together as a single measure for the purposes of this dispute.

We also note that a comparable issue has arisen in two cases relating to SPS measures (Japan — Apples and Australia — Apples), where the panels considered whether various requirements imposed by Japan and Australia respectively, and embodied in different instruments, should be treated as a single measure or as a combination of several individual measures.(423) In these cases, in addition to considering whether the different requirements might constitute a single measure for the purposes of dispute settlement under the DSU(424), the panel also had to consider whether they constituted a “phytosanitary measure” within the meaning of the SPS Agreement, an issue that is not before this Panel. Nonetheless, we find that the test developed by the panel in Japan — Apples provides useful guidance for our analysis. The panel in that case considered that the various requirements were interrelated and cumulatively constituted the measures actually applied by Japan to the importation of US apple fruit to protect against the entry, establishment or spread of fire blight within its territory.(425) That panel therefore saw no legal, logical or factual obstacle to treating the requirements identified by the United States as a single phytosanitary measure within the meaning of the SPS Agreement.(426)

Similarly, we see no “legal, factual or logical obstacle”(427) to treating the various interrelated legal instruments identified by Mexico as the basis for its claims in these proceedings as a single measure for the purposes of our findings. Accordingly, we will consider them together throughout these findings. These measures taken together are hereafter referred to as “the US dolphin-safe labelling provisions”.”(428)

(v) Effect of “as such” and “as applied” claims on the identification of measures at issues

General

277. The Panel, in US — Continued Zeroing, noted that the distinction between claims that take issue with measures of general and prospective application (“as such” claims) and claims targeting acts that apply to specific situations (“as applied” claims) was “developed as an analytical tool to facilitate the understanding of the nature of the measure at issue”(429). In agreeing with the Panel, the Appellate Body noted the relevance of this distinction in the identification of the measures at issue:

“We share the Panel’s view that the distinction between “as such” and “as applied” claims does not govern the definition of a measure for purposes of WTO dispute settlement. This distinction has been developed in the jurisprudence as an analytical tool to facilitate the understanding of the nature of a measure at issue. This heuristic device, however useful, does not define exhaustively the types of measures that may be subject to challenge in WTO dispute settlement. In order to be susceptible to challenge, a measure need not fit squarely within one of these two categories, that is, either as a rule or norm of general and prospective application, or as an individual instance of the application of a rule or norm.”(430)

Distinction to be drawn between laws “as such” and “as applied” when assessing measures

278. The Appellate Body observed in US — 1916 Act the existence of a long line of GATT cases that “firmly established” the principle that complaining parties were permitted to challenge measures “as such”: and noted how, since the entry into force of the WTO, numerous panels had dealt with claims “as such”:

“Prior to the entry into force of the WTO Agreement, it was firmly established that
Article XXIII:1(a) of the GATT 1947 allowed a Contracting Party to challenge legislation as such, independently from the application of that legislation in specific instances. While the text of
Article XXIII does not expressly address the matter, panels consistently considered that, under
Article XXIII, they had the jurisdiction to deal with claims against legislation as such.(431) In examining such claims, panels developed the concept that mandatory and discretionary legislation should be distinguished from each other, reasoning that only legislation that mandates a violation of GATT obligations can be found as such to be inconsistent with those obligations. We consider the application of this distinction to the present cases in
section IV(B) below.

Thus, that a Contracting Party could challenge legislation as such before a panel was well-settled under the GATT 1947. We consider that the case law articulating and applying this practice forms part of the GATT acquis which, under
Article XVI:1 of the WTO Agreement, provides guidance to the WTO and, therefore, to panels and the Appellate Body. Furthermore, in Article 3.1 of the DSU, Members affirm ‘their adherence to the principles for the management of disputes heretofore applied under
Articles XXII and
XXIII of GATT 1947’. We note that, since the entry into force of the WTO Agreement, a number of panels have dealt with dispute settlement claims brought against a Member on the basis of its legislation as such, independently from the application of that legislation in specific instances.”(432),(433)

“As such” claims

General

279. In US — Oil Country Tubular Goods Sunset Reviews, the Appellate Body discussed the characteristics of measures that would be subject to “as such” claims:

“In our view, ‘as such’ challenges against a Member’s measures in WTO dispute settlement proceedings are serious challenges. By definition, an ‘as such’ claim challenges laws, regulations, or other instruments of a Member that have general and prospective application, asserting that a Member’s conduct — not only in a particular instance that has occurred, but in future situations as well — will necessarily be inconsistent with that Member’s WTO obligations. In essence, complaining parties bringing ‘as such’ challenges seek to prevent Members ex ante from engaging in certain conduct. The implications of such challenges are obviously more far-reaching than ‘as applied’ claims.”(434)

280. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body explained how the analysis should be done when a measure is challenged “as such”:

“When a measure is challenged ‘as such’, the starting point for an analysis must be the measure on its face. If the meaning and content of the measure are clear on its face, then the consistency of the measure as such can be assessed on that basis alone. If, however, the meaning or content of the measure is not evident on its face, further examination is required.”(435)

Instruments with normative value

281. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body considered that instruments containing rules or norms could constitute a “measure”, irrespective of how or whether those rules or norms are applied in a particular instance:

“[I]n GATT and WTO dispute settlement practice, panels have frequently examined measures consisting not only of particular acts applied only to a specific situation, but also of acts setting forth rules or norms that are intended to have general and prospective application.(436) In other words, instruments of a Member containing rules or norms could constitute a ‘measure’, irrespective of how or whether those rules or norms are applied in a particular instance. This is so because the disciplines of the GATT and the WTO, as well as the dispute settlement system, are intended to protect not only existing trade but also the security and predictability needed to conduct future trade. This objective would be frustrated if instruments setting out rules or norms inconsistent with a Member’s obligations could not be brought before a panel once they have been adopted and irrespective of any particular instance of application of such rules or norms.(437) It would also lead to a multiplicity of litigation if instruments embodying rules or norms could not be challenged as such, but only in the instances of their application. Thus, allowing claims against measures, as such, serves the purpose of preventing future disputes by allowing the root of WTO-inconsistent
behaviour to be eliminated.”(438)

282. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body stressed the importance of an examination of the normative nature of the legal instrument at issue, the Sunset Policy Bulletin, when determining whether it is a measure subject to dispute settlement:

“The Panel adopted a similar narrow approach in finding that the Sunset Policy Bulletin is not an ‘administrative procedure’ within the meaning of Article 18.4 of the Anti-Dumping Agreement. Having adopted the view that an administrative procedure is ‘a pre-established rule for the conduct of an anti-dumping investigation’(439), the Panel assumed that a ‘rule’ means a ‘mandatory rule’ and used its previous finding that the Sunset Policy Bulletin is not a mandatory legal instrument to come to the conclusion that it therefore cannot be an administrative procedure. Again, the Panel did not consider the normative nature of the provisions of the Sunset Policy Bulletin, nor compare the type of norms that USDOC is required to publish in formal regulations with the type of norms it may set out in policy statements. These inquiries would have assisted the Panel in determining whether the Sunset Policy Bulletin is, in fact, an ‘administrative procedure’ within the meaning of Article 18.4 of the Anti-Dumping Agreement.”(440)

283. In US — Oil Country Tubular Goods Sunset Reviews, another anti-dumping case dealing with the United States Sunset Policy Bulletin (see US — Corrosion-Resistant Steel Sunset Review,
paragraphs 281 and 282 above), the Appellate Body stressed that whether an instrument has legal value under domestic law is immaterial when establishing whether it can be a measure subject to dispute settlement. The Appellate Body, referring to its findings in US — Corrosion-Resistant Steel Sunset Review, explained that what matters is that the instrument has normative value, meaning: providing administrative guidance, creating expectations among the public and among private actors, and intended to have general and prospective application:

“We note the argument of the United States that the SPB is not a legal instrument under United States law. This argument, however, is not relevant to the question before us. The issue is not whether the SPB is a legal instrument within the domestic legal system of the United States, but rather, whether the SPB is a measure that may be challenged within the WTO system. The United States has explained that, within the domestic legal system of the United States, the SPB does not bind the USDOC and that the USDOC ‘is entirely free to depart from [the] SPB at any time’. However, it is not for us to opine on matters of United States domestic law. Our mandate is confined to clarifying the provisions of the WTO Agreement and to determining whether the challenged measures are consistent with those provisions. As noted by the United States, in US — Corrosion-Resistant
Steel Sunset Review, the Appellate Body indicated that ‘acts setting forth rules or norms that are intended to have general and prospective application’ are measures subject to WTO dispute settlement.(441) We disagree with the United States’ application of these criteria to the SPB. In our view, the SPB has normative value, as it provides administrative guidance and creates expectations among the public and among private actors.(442) It is intended to have general application, as it is to apply to all the sunset reviews conducted in the United States. It is also intended to have prospective application, as it is intended to apply to sunset reviews taking place after its issuance. Thus, we confirm — once again — that the SPB, as such, is subject to WTO dispute settlement.”(443)

284. In EC — IT Products, the Panel noted that, in general, measures challenged “as such” should have general and prospective application, and “necessarily” result in a breach of WTO obligations.(444) The Panel observed that the legal effect of a measure is not a primary issue in an assessment of whether a measure can be challenged “as such”. Rather, the issue is whether the measure sets forth rules or norms that are intended to have general and prospective application, and whether the measure has normative value in providing administrative guidance and creating expectations among the public and among private sectors:

“[I]n the Panel’s view, the legal effect of CNEN on the CN is not the primary issue before it. The issue before it is whether CNEN set forth rules or norms that are intended to have general and prospective application, and whether CNEN have normative value in providing administrative guidance, and create expectations among the public and among private actors. Stated another way, the issue is whether CNEN are ‘authoritative’ such that ‘per se’ requirements set out in the CNEN could validly form the basis of an ‘as such’ claim of a breach of Article II of the GATT.”(445)

285. In US — Zeroing (EC), the Appellate Body addressed whether the United States’ zeroing methodology could be challenged as such as a measure in dispute settlement proceedings.(446) The European Communities asserted that, in this case, “overwhelming” evidence exists demonstrating that the zeroing methodology is a “norm”.(447) In reaching its findings, the Appellate Body first reiterated, as related to the concept of “measure”, that “rules or norms” could be challenged, as such, even if they are not expressed in the form of a written instrument.(448) Subsequently, the Appellate Body upheld the Panel’s determination (although for separate reasons) that the United States’ zeroing methodology could be challenged, as such, due to its “general and prospective application” under the specific circumstances of the dispute:

“In our view, when bringing a challenge against such a ‘rule or norm’ that constitutes a measure of general and prospective application, a complaining party must clearly establish, through arguments and supporting evidence, at least that the alleged ‘rule or norm’ is attributable to the responding Member; its precise content; and indeed, that it does have general and prospective application. It is only if the complaining party meets this high threshold, and puts forward sufficient evidence with respect to each of these elements, that a panel would be in a position to find that the ‘rule or norm’ may be challenged, as such. This evidence may include proof of the systematic application of the challenged ‘rule or norm’. Particular rigour is required on the part of a panel to support a conclusion as to the existence of a ‘rule or norm’ that is not expressed in the form of a written document. A panel must carefully examine the concrete instrumentalities that evidence the existence of the purported ‘rule or norm’ in order to conclude that such ‘rule or norm’ can be challenged, as such.(449)

…

[W]e believe that, in the specific circumstances of this case, the evidence before the Panel was sufficient to identify the precise content of the zeroing methodology; that the zeroing methodology is attributable to the United States, and that it does have general and prospective application. This evidence consisted of considerably more than a string of cases, or repeat action, based on which the Panel would have simply divined the existence of a measure in the abstract. We therefore cannot agree with the United States that the Panel’s approach, in this case, would mean that when a Member does something in a particular instance, the Member’s action results in a separate measure that may be subject to an ‘as such’ challenge, at least if the Member repeats the action with some indeterminate frequency.(450)

In the light of these considerations, we conclude, albeit for reasons different from those set out by the Panel, that the zeroing methodology, as it relates to original investigations in which the weighted-average-to-weighted-average comparison method is used to calculate margins of dumping, can be challenged, as such, in WTO dispute settlement.”(451)

286. The Appellate Body in US — Zeroing (EC) also determined that a separate measure, the United States’ “Standard Zeroing Procedures”, was not an “act or instrument that sets forth rules or norms intended to have general and prospective application” to be challenged, as such, due to the fact that such procedures are only applicable in particular anti-dumping proceedings.(452) The Appellate Body referred to the Panel’s analysis in this regard:

“The Panel found that ‘to characterize the ’standard Zeroing Procedures’ as an act or instrument that sets forth rules or norms intended to have general and prospective application is somewhat difficult to reconcile with the fact that the ’standard Zeroing Procedures’ are only applicable in a particular anti-dumping proceeding as a result of their inclusion in the computer program[] used in that particular proceeding.’(453) According to the Panel, ‘the need to incorporate these lines of computer code into each individual program[] indicates that it is not the ’standard Zeroing Procedures’ per se that set forth rules or norms of general and prospective application.’(454) We agree with the Panel. Therefore, we find that the Standard Zeroing Procedures are not a measure that can be challenged, as such, in WTO dispute settlement.”(455)

287. In US — Zeroing (Japan), the Panel was faced with the question of whether a measure described as “the standard zeroing line” could be challenged as such along with the “zeroing procedures”. In a finding upheld by the Appellate Body, the Panel concluded that, while the “standard zeroing line” was not a measure that could be subject to dispute settlement, “the zeroing procedures” could indeed be a measure challengeable as such:

“We now turn to the issue of whether what Japan terms ‘zeroing procedures’ can be considered to be a measure that can be challenged as such in light of the criteria enunciated by the Appellate Body, particularly in US — Zeroing (EC). It is our understanding that by ‘zeroing procedures’, Japan means the zeroing methodology per se, as distinguished from the standard zeroing
line. The concept of zeroing procedures, as used by Japan in this proceeding, does not correspond to a provision of legislation or regulation of the United States or to any other type of written instrument adopted by the United States that explicitly provides for zeroing as a rule or norm of general and prospective application. This raises the question of whether a procedure not to be found in legislation or regulation or in some other form of written instrument may nevertheless constitute a measure challengeable as such in WTO dispute settlement. A closely related question that arises is whether it is of any consequence that the term ‘zeroing procedures’ is not employed in the anti-dumping legislation and practice of the United States but has been created by Japan for the purpose of this dispute settlement proceeding.

We consider, consistent with the reasoning of the Appellate Body in US — Corrosion-Resistant
Steel Sunset Review, that the fact that a norm to act in a given way in a given situation is not contained in legislation or regulation does not entail that such a norm cannot be challenged as such in WTO dispute settlement.(456) In order for a measure to have the ‘normative value’ necessary to render it susceptible of being challenged as such, the measure must meet certain requirements. Its content must be clear and it must be understood by those to whom it will apply that it will be applied generally and prospectively. We also concur with the observation of the panel in US — Zeroing (EC) that a finding regarding the WTO-inconsistency of a norm as such must be based on solid evidence enabling a panel to determine the precise content of the norm and the future conduct to which it will necessarily give rise.(457) It standards to reason that a measure can only have these properties if it has a legal basis and that a measure is unlikely to be capable of being challenged as such in WTO dispute settlement if it not grounded in the relevant domestic legal framework. However, this does not mean that the measure must be necessarily be in the nature of legislation or regulation.

…

[T]he evidence before us is sufficient to conclude that a rule or norm exists providing for the application of zeroing whenever USDOC calculates margins of dumping or duty assessment rates.”(458) (footnotes omitted)

288. In arriving at the conclusion discussed in
paragraph 287 above, the Panel in US — Zeroing (Japan) acknowledged the difficulties of providing evidence when the rule or norm is not contained in a written instrument:

“We also do not consider that the fact that there exists no written instrument that explicitly lays down a rule or norm of zeroing is of decisive importance. We can see no logical basis in the GATT and WTO dispute settlement practice for the proposition that an ‘as such’ claim is only possible where a rule or norm of general and prospective application is recorded in a written instrument. …

We recognize that an analysis of an ‘as such’ claim regarding a measure not embodied in legislation or regulation or other type of written instrument raises particular problems with respect to the evidence required to establish that the measure constitutes a rule or norm of general and prospective application, especially because, in our view, consistent practice is to be distinguished from the notion of a rule or norm of general and prospective application.”(459)

Discretionary versus mandatory legislative rule

Reference to previous GATT practice

289. In US — 1916 Act (EC), the United States argued, inter alia, that, according to established GATT practice, the measure at issue, referred to as the 1916 Act, could not be challenged “as such”, i.e. independently of its application in a specific case, because it was “discretionary legislation”. Specifically, the United States argued that the 1916 Act was non-mandatory because “(i) with respect to both civil and criminal proceedings, United States’ courts had in the past interpreted and/or could in the future interpret the 1916 Act in a manner consistent with the WTO obligations of the United States and (ii) the United States Department of Justice had discretion whether to initiate criminal proceedings under the 1916 Act.”(460) The Appellate Body recalled GATT practice in respect of this subject-matter. See
paragraph 278 above.

Relevant type of discretion for distinguishing between discretionary and mandatory legislation

290. Referring to the GATT Panel Report on US — Tobacco, the Appellate Body in US — 1916 Act emphasized that the type of discretion relevant for the distinction between discretionary and mandatory legislation was discretion vested with the executive branch. Also, the Appellate Body agreed with the Panel in US — 1916 Act in rejecting the argument that the United States Department of Justice enjoyed discretion within the meaning of established GATT practice:

“The practice of GATT panels was summed up in United States — Tobacco(461) as follows:

‘… panels had consistently ruled that legislation which mandated action inconsistent with the General Agreement could be challenged as such, whereas legislation which merely gave the discretion to the executive authority of a contracting party to act inconsistently with the General Agreement could not be challenged as such; only the actual application of such legislation inconsistent with the General Agreement could be subject to challenge.(462)’ (emphasis added)

Thus, the relevant discretion, for purposes of distinguishing between mandatory and discretionary legislation, is a discretion vested in the executive branch of government.

The 1916 Act provides for two types of actions to be brought in a United States federal court: a civil action initiated by private parties, and a criminal action initiated by the United States Department of Justice. Turning first to the civil action, we note that there is no relevant discretion accorded to the executive branch of the United States’ government with respect to such action. These civil actions are brought by private parties. A judge faced with such proceedings must simply apply the 1916 Act. In consequence, so far as the civil actions that may be brought under the 1916 Act are concerned, the 1916 Act is clearly mandatory legislation as that term has been understood for purposes of the distinction between mandatory and discretionary legislation.” (463)

Assessment of whether or not legislation “mandates” action

291. In US — Upland Cotton, Brazil challenged section 1207(a) of the FSRI Act of 2002 mandating user marketing payments to exporters of upland cotton as a per se export subsidy in violation of relevant provisions of the Agreement on Agriculture. Brazil argued that the text of this measure clearly indicates that the user marketing programme is mandatory in that the United States Secretary of Agriculture did not have discretion to apply it in a WTO-consistent manner. The United States argued that the relevant question under a mandatory/discretionary analysis is whether the provisions establishing the export credit guarantee programmes mandate a breach of any WTO obligation. The Panel in US — Upland Cotton considered the use of “shall” in the language of the statute of the measure at issue, and the fact that payments must be made to all those who meet the conditions for eligibility in determining that the measure was mandatory and not discretionary. The Panel explained:

“We are of the view that Section 1207(a)(1) of the FSRI Act of 2002 mandates the granting of subsidies in that the United States authorities have no discretion not to allow it if exporters fulfil certain conditions. This is not a situation in which the United States executive enjoys a discretion to somehow grant user marketing (Step 2) payments to exporters in a WTO-consistent manner. Every user marketing (Step 2) payment to an exporter constitutes a prohibited export subsidy.

The fact that the actual payment of subsidies is triggered only if certain market conditions prevail does not impact upon our analysis of the normative nature and operation of the measure within the United States legal system. The operation of the world upland cotton market, and the underlying determinative prices for the level of user marketing (Step 2) payments to upland cotton, are not exclusively within the control of the United States government. When certain market conditions exist, the Secretary of Agriculture has no discretion: the payments are automatically triggered.”(464)

292. In US — DRAMS, Korea challenged certain certification requirements under the United States’ antidumping law. The provision challenged by Korea required exporters to certify, upon removal of antidumping duties, that they agreed to the reinstatement of the anti-dumping duties on the products of their company if, after revocation of the original antidumping duties, the United States’ authorities found dumping. The Panel rejected the Korean arguments, noting that the certification requirement was not a mandatory requirement for revocation under United States’ anti-dumping law in general. The Panel held that other provisions of United States anti-dumping law and regulations of the United States authorities made revocation of an anti-dumping order possible contingent upon a different set of requirements, not including the certification requirement:

“We note section 751(b) of the 1930 Tariff Act (as amended) and section 353.25(d) of the DOC’s regulations, whereby an anti-dumping order may be revoked on the basis of ‘changed circumstances’. We note that neither of these provisions imposes a certification requirement. In other words, an anti-dumping order may be revoked under these provisions absent fulfilment of the section 353.25(a)(2)(iii) certification requirement. We also note that Korea has not challenged the consistency of these provisions with the WTO Agreement. Thus, because of the existence of legislative avenues for Article 11.2-type reviews that do not impose a certification requirement, and which have not been found inconsistent with the WTO Agreement, we are precluded from finding that the section 353.25(a)(2)(iii) certification requirement in and of itself amounts to a mandatory requirement inconsistent with Article 11.2 of the AD Agreement.”(465)

293. In Canada — Aircraft, Brazil argued that a programme of the so-called Export Development Corporation (EDC) mandated the grant of subsidies and challenged the programme as such, rather than merely specific applications of this programme. However, the Panel noted that Brazil had conceded that the EDC programme had been interpreted as requiring the programme to give Canadian exporters an “edge” and rejected Brazil’s claim:

“[W]e find nothing in Brazil’s various submissions in support of this argument. The only factual evidence proffered by Brazil in support of its argument is the quote from EDC’s mandate that EDC was established ‘for the purposes of supporting and developing, directly or indirectly, Canada’s export trade and Canadian capacity to engage in that trade and to respond to international business opportunities.’ This statement by itself clearly cannot be viewed as a requirement to provide prohibited export subsidies. Nor has Brazil demonstrated otherwise that such support and development necessarily involves subsidization. Although such support and development might conceivably take the form of subsidization, there is nothing to suggest that this will necessarily be the case. In our view, a mandate to support and develop Canada’s export trade does not amount to a mandate to grant subsidies, since such support and development could be provided in a broad variety of ways.

… We again recall that the panel in US — Tobacco recollected ‘that panels had consistently ruled that legislation which mandated action inconsistent with the General Agreement could be challenged as such, whereas legislation which merely gave the discretion to the executive authority … to act inconsistently with the General Agreement could not be challenged as such …’”(466)

Should the mandatory or discretionary question be determined before a substantive finding?

294. In US — Export Restraints, the question arose whether the Panel should first determine whether the measure at issue was mandatory or discretionary, and make a substantive finding only if it found the measure to be mandatory. The Panel declined to consider the mandatory/discretionary distinction as a threshold question. In the Panel’s view, identifying and addressing the relevant WTO obligations first would facilitate its assessment of the manner in which the legislation at issue addressed those obligations, and whether any violation arose therefrom. In its analysis the Panel referred to the test developed by the GATT Panel in US — Tobacco:

“We are not aware of any GATT/WTO precedent that would require a panel to consider whether legislation is mandatory or discretionary before examining the substance of the provisions at issue. To the contrary, we note that a number of panels, in disputes concerning the consistency of legislation, have not considered the mandatory/discretionary question in the abstract and as a necessarily threshold issue. Rather, the panels in those cases first resolved any controversy as to the requirements of the GATT/WTO obligations at issue, and only then considered in light of those findings whether the defending party had demonstrated adequately that it had sufficient discretion to conform with those rules. That is, the mandatory/discretionary distinction was applied in a given substantive context(467)

We consider such an approach to be appropriate in this case. In particular, identifying and addressing the relevant WTO obligations first will facilitate our assessment of the manner in which the legislation addresses those obligations, and whether any violation is involved. That is, it is after we have considered both the substance of the claims in respect of WTO provisions and the relevant provisions of the legislation at issue that we will be in the best position to determine whether the legislation requires a treatment of export restraints that violates those provisions.

Finally, we note that, whether or not a panel sees the mandatory/discretionary question as a necessarily threshold issue or, as suggested by Canada, as an issue that may arise as part of a panel’s examination of the legal claims, it remains true — at least under the classical test which we shall be employing — that legislation as such cannot be found to be inconsistent with a Member’s WTO obligations unless it is mandatory in nature. Thus, in any event, the order in which the two issues — the question of the type of legislation and the substance of the case — are addressed would not alter any eventual finding of consistency or lack thereof. “(468)

295. In US — Section 129(c)(1) URAA, the Panel did not follow the approach of the Panel in US — Export Restraints(469) and preferred to analyse first whether the United States’ legislation at issue was mandatory, before analysing whether the behaviour mandated would be inconsistent with the relevant WTO provisions.(470)

Rejection of the mandatory versus discretionary distinction

296. The Panel in US — Section 301 Trade Act did not accept the distinction between discretionary and mandatory legislation in the context of a claim made pursuant to Article 23 of the DSU. In this case, the United States was defending the measure at issue with reference to the traditional doctrine that only mandatory laws can violate GATT law “as such”. In contrast, the European Communities argued that certain discretionary legislation could also violate GATT law “as such”. The Panel did not accept the United States’ argument:

“[W]e believe that resolving the dispute as to which type of legislation, in abstract, is capable of violating WTO obligations is not germane to the resolution of the type of claims before us. In our view the appropriate method in cases such as this is to examine with care the nature of the WTO obligation at issue and to evaluate the Measure in question in the light of such examination. The question is then whether, on the correct interpretation of the specific WTO obligation at issue, only mandatory or also discretionary national laws are prohibited. We do not accept the legal logic that there has to be one fast and hard rule covering all domestic legislation. After all, is it so implausible that the framers of the WTO Agreement, in their wisdom, would have crafted some obligations which would render illegal even discretionary legislation and crafted other obligations prohibiting only mandatory legislation?(471) Whether or not Section 304 violates Article 23 depends, thus, first and foremost on the precise obligations contained in Article 23.

We can express this view in a different way:

(a) Even if we were to operate on the legal assumption that, as argued by the US, only legislation mandating a WTO inconsistency or precluding WTO consistency, can violate WTO provisions; and

(b) confirm our earlier factual finding in paragraph 7.31(c) that the USTR enjoys full discretion to decide on the content of the determination,

we would still disagree with the US that the combination of (a) and (b) necessarily renders Section 304 compatible with Article 23, since Article 23 may prohibit legislation with certain discretionary elements and therefore the very fact of having in the legislation such discretion could, in effect, preclude WTO consistency. In other words, rejecting, as we have, the presumption implicit in the US argument that no WTO provision ever prohibits discretionary legislation does not imply a reversal of the classical test in the pre-existing jurisprudence that only legislation mandating a WTO inconsistency or precluding WTO consistency, could, as such, violate WTO provisions.(472) Indeed that is the very test we shall apply in our analysis. It simply does not follow from this test, as sometimes has been argued, that legislation with discretion could never violate the WTO. If, for example, it is found that the specific obligations in Article 23 prohibit a certain type of legislative discretion, the existence of such discretion in the statutory language of Section 304 would presumptively preclude WTO consistency.”(473)

297. In US — 1916 Act, the Appellate Body, further to referring to GATT practice (see
paragraphs 278 and 289 above), declined to answer the question of whether the mandatory/discretionary distinction continued to be relevant under WTO law:

“We note that answering the question of the continuing relevance of the distinction between mandatory and discretionary legislation for claims brought under the Anti-Dumping Agreement would have no impact upon the outcome of these appeals, because the 1916 Act is clearly not discretionary legislation, as that term has been understood for purposes of distinguishing between mandatory and discretionary legislation. Therefore, we do not find it necessary to consider, in these cases, whether
Article 18.4, or any other provision of the Anti-Dumping Agreement, has supplanted or modified the distinction between mandatory and discretionary legislation.(474) For the same reasons, the Panel did not, in the Japan Panel Report, need to opine on this issue.”(475),(476)

298. In US — Countervailing Measures on Certain EC Products, the Appellate Body, when examining the question whether Section 1677(5) (F) was inconsistent per se with the WTO obligations of the United States because it mandated a particular WTO-inconsistent method of determining the existence of a “benefit”, clarified in a footnote that: “We are not, by implication, precluding the possibility that a Member could violate its WTO obligations by enacting legislation granting discretion to its authorities to act in violation of its WTO obligation. We make no finding in this respect.(477)

299. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body, in the context of an anti-dumping dispute, for the first time, did not follow the traditional mandatory versus discretionary rule and found that it saw no reason for concluding that, in principle, non-mandatory measures cannot be challenged “as such”. In this case, the measure at issue was the United States Sunset Policy Bulletin which the Panel had found not to be challengeable as such because it was not mandatory for the competent authorities. The Appellate Body stated:

“We also believe that the provisions of Article 18.4 of the Anti-Dumping Agreement are relevant to the question of the type of measures that may, as such, be submitted to dispute settlement under that Agreement.
Article 18.4 contains an explicit obligation for Members to ‘take all necessary steps, of a general or particular character’ to ensure that their ‘laws, regulations and administrative procedures’ are in conformity with the obligations set forth in the Anti-Dumping Agreement. Taken as a whole, the phrase ‘laws, regulations and administrative procedures’ seems to us to encompass the entire body of generally applicable rules, norms and standards adopted by Members in connection with the conduct of antidumping proceedings.(478) If some of these types of measure could not, as such, be subject to dispute settlement under the Anti-Dumping Agreement, it would frustrate the obligation of ‘conformity’ set forth in
Article 18.4.

This analysis leads us to conclude that there is no basis, either in the practice of the GATT and the WTO generally or in the provisions of the Anti-Dumping Agreement, for finding that only certain types of measure can, as such, be challenged in dispute settlement proceedings under the Anti-Dumping Agreement. Hence we see no reason for concluding that, in principle, non-mandatory measures cannot be challenged ‘as such’. To the extent that the Panel’s findings in paragraphs 7.145, 7.195, and 7.246 of the Panel Report suggest otherwise, we consider them to be in error.

We observe, too, that allowing measures to be the subject of dispute settlement proceedings, whether or not they are of a mandatory character, is consistent with the comprehensive nature of the right of Members to resort to dispute settlement to ‘preserve [their] rights and obligations … under the covered agreements, and to clarify the existing provisions of those agreements’.(479) As long as a Member respects the principles set forth in Articles 3.7 and 3.10 of the DSU, namely, to exercise their ‘judgement as to whether action under these procedures would be fruitful’ and to engage in dispute settlement in good faith, then that Member is entitled to request a panel to examine measures that the Member considers nullify or impair its benefits. We do not think that panels are obliged, as a preliminary jurisdictional matter, to examine whether the challenged measure is mandatory. This issue is relevant, if at all, only as part of the panel’s assessment of whether the measure is, as such, inconsistent with particular obligations. “(480)

300. In US — Corrosion-Resistant Steel Sunset Review, the Appellate Body, referring to its previous report in US — 1916 Act where it did follow mandatory/discretionary rule, indicated that it had yet to pronounce itself generally upon the continuing relevance of such a distinction and warned against its “mechanistic application”:

“We explained in US — 1916 Act that this analytical tool existed prior to the establishment of the WTO, and that a number of GATT panels had used it as a technique for evaluating claims brought against legislation as such.(481) As the Panel seemed to acknowledge(482), we have not, as yet, been required to pronounce generally upon the continuing relevance or significance of the mandatory/discretionary distinction.(483) Nor do we consider that this appeal calls for us to undertake a comprehensive examination of this distinction. We do, nevertheless, wish to observe that, as with any such analytical tool, the import of the ‘mandatory/discretionary distinction’ may vary from case to case. For this reason, we also wish to caution against the application of this distinction in a mechanistic fashion.”(484)

301. In US — Zeroing (EC), the Appellate Body relied on its view expressed in US — Corrosion-Resistant Steel Sunset Review that the mandatory/discretionary distinction should not be applied mechanistically. In the context of assessing whether a Panel violated Article 11 of the DSU by failing to apply the mandatory/discretionary distinction in analyzing and finding a violation of Article 2.4.2 of the Anti-Dumping Agreement, the Appellate Body reiterated that “the import of the ‘mandatory/discretionary distinction’ may vary from case to case.(485)

(e) Fourth requirement: The request must provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly.

(i) General

302. In Korea — Dairy, the Appellate Body noted that the fourth requirement has two distinct elements:

“[I]n its fourth requirement, Article 6.2 demands only a summary-and it may be a brief one-of the legal basis of the complaint; but the summary must, in any event, be one that is ’sufficient to present the problem clearly’. It is not enough, in other words, that ‘the legal basis of the complaint’ is summarily identified; the identification must ‘present the problem clearly’.(486)

303. In India — Patents (US), the Appellate Body stressed the importance of the parties’ duty to be “fully forthcoming” and to clearly state their claims:

“All parties engaged in dispute settlement under the DSU must be fully forthcoming from the very beginning both as to the claims involved in a dispute and as to the facts relating to those claims. Claims must be stated clearly(487)”

(ii) Concept of “claim”

304. The Appellate Body in Guatemala — Cement I noted that “the legal basis of the complaint” could also be referred to as “the claims”.(488)

305. In Korea — Dairy, when distinguishing between claims and arguments, the Appellate Body emphasized that “[b]y ‘claim’ we mean a claim that the respondent party has violated, or nullified or impaired the benefits arising from, an identified provision of a particular agreement.”(489)

(iii) Identification of the claims

General

306. In Thailand — H-Beams, the Appellate Body stressed the importance of the request for establishment of a Panel while outlining the complaining parties’ duty to be precise in identifying the legal basis of the complaint:

“In view of the importance of the request for the establishment of a panel, we encourage complaining parties to be precise in identifying the legal basis of the complaint. We also note that nothing in the DSU prevents a defending party from requesting further clarification on the claims raised in a panel request from the complaining party, even before the filing of the first written submission.(490)

Identification of treaty provisions

307. In Korea — Dairy, the Appellate Body stated that the identification of the treaty provisions is always necessary for purposes of defining the terms of reference of a panel and for informing the respondent of the claims:

“Identification of the treaty provisions claimed to have been violated by the respondent is always necessary both for purposes of defining the terms of reference of a panel and for informing the respondent and the third parties of the claims made by the complainant; such identification is a minimum prerequisite if the legal basis of the complaint is to be presented at all. But it may not always be enough. There may be situations where the simple listing of the articles of the agreement or agreements involved may, in the light of attendant circumstances, suffice to meet the standard of clarity in the statement of the legal basis of the complaint. However, there may also be situations in which the circumstances are such that the mere listing of treaty articles would not satisfy the standard of Article 6.2. This may be the case, for instance, where the articles listed establish not one single, distinct obligation, but rather multiple obligations. In such a situation, the listing of articles of an agreement, in and of itself, may fall short of the standard of Article 6.2.”(491)

308. In EC — Bananas III, the Panel indicated that making references to a WTO agreement without mentioning any provisions or alluding to unidentified “other” provisions would be insufficient to meet the requirements of Article 6.2:

“The panel request alleges an inconsistency with the requirements of the Agreement on Agriculture, without specifying any provision thereof. It also states that ‘the EC’s measures are inconsistent with the following Agreements and provisions among others’, suggesting that there may be inconsistencies with unspecified agreements and inconsistencies with unspecified provisions of the specified agreements. In these two situations, it is not possible at the panel request stage, even in the broadest generic terms, to describe what legal ‘problem’ is asserted. While a reference to a specific provision of a specific agreement may not be essential if the problem or legal claim is otherwise clearly described, in the absence of some description of the problem, a mere reference to an entire agreement or simply to ‘other’ unspecified agreements or provisions is inadequate under the terms of Article 6.2. Accordingly, we find that references to a WTO agreement without mentioning any provisions or to unidentified ‘other’ provisions are too vague to meet the standards of Article 6.2 of the DSU.”(492)

309. The Panel in EC — Bananas III also held that “[a] request [for the establishment of a panel] is sufficiently specific to comply with the minimum standards established by the terms of Article 6.2 of the DSU”, if it lists the provisions of the specific agreements which the complaining party alleges to have been violated. The Appellate Body agreed:

“We accept the Panel’s view that it was sufficient for the Complaining Parties to list the provisions of the specific agreements alleged to have been violated without setting out detailed arguments as to which specific aspects of the measures at issue relate to which specific provisions of those agreements. In our view, there is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel’s terms of reference under Article 7 of the DSU, and the
arguments supporting those claims, which are set out and progressively clarified in the first written submissions, the rebuttal submissions, the rebuttal submissions and the first and second panel meetings with the parties.”(493) (emphasis original)

310. In India — Patents (US), India argued that the Panel exceeded its authority under the DSU by ruling on the United States’ subsidiary claim under Article 63 of the TRIPS Agreement after having first accepted the principal claim by the United States of a violation of Article 70.8 of the TRIPS Agreement. The request for the establishment of the panel by the United States reads in pertinent part: “India’s legal regime appears to be inconsistent with the obligations of the TRIPS Agreement, including but not necessarily limited to Articles 27, 65 and 70.” The Appellate Body accepted India’s argument that the phrase “including but not necessarily limited to” could not be used to include non-specified claims:

“[A] claim must be included in the request for establishment of a panel in order to come within a panel’s terms of reference in a given case.

With respect to Article 63, the convenient phrase, ‘including but not necessarily limited to’, is simply not adequate to ‘identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly’ as required by Article 6.2 of the DSU. If this phrase incorporates Article 63, what Article of the TRIPS Agreement does it not incorporate? Therefore, this phrase is not sufficient to bring a claim relating to Article 63 within the terms of reference of the Panel.”(494)

311. The Appellate Body in Korea — Dairy confirmed its finding in EC — Bananas III, but cautioned that this finding represented only the minimum requirements under Article 6.2 and that the “mere listing of the articles of an agreement alleged to have been breached” may not necessarily be sufficient for the purposes of Article 6.2. The Appellate Body opined that the latter case may arise “where the articles listed establish not one single, distinct obligation, but rather multiple obligations. In such a situation, the listing of articles of an agreement, in and of itself, may fall short of the standard of Article 6.2”. Ultimately, the Appellate Body set forth the standard of the “ability of the respondent to defend itself:

“[W]e did not purport in European Communities — Bananas to establish the mere listing of the articles of an agreement alleged to have been breached as a standard of precision, observance of which would always constitute sufficient compliance with the requirements of Article 6.2, in each and every case, without regard to the particular circumstances of such cases. If we were in fact attempting to construct such a rule in that case, there would have been little point to our enjoining panels to examine a request for a panel ‘very carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU‘. Close scrutiny of what we in fact said in European Communities — Bananas shows that we, firstly, restated the reasons why precision is necessary in a request for a panel; secondly, we stressed that claims, not detailed arguments, are what need to be set out with sufficient clarity; and thirdly, we agreed with the conclusion of the panel that, in that case, the listing of the articles of the agreements claimed to have been violated satisfied the minimum requirements of Article 6.2 of the DSU. In view of all the circumstances surrounding that case, we concurred with the panel that the European Communities had not been misled as to what claims were in fact being asserted against it as respondent.

…

[W]e consider that whether the mere listing of the articles claimed to have been violated meets the standard of Article 6.2 must be examined on a case-by-case basis. In resolving that question, we take into account whether the ability of the respondent to defend itself was prejudiced, given the actual course of the panel proceedings, by the fact that the panel request simply listed the provisions claimed to have been violated.”(495)

312. In US — Lamb the United States requested the Panel to rule that the panel requests of the complainants were insufficiently specific as they had merely listed the provisions of the Safeguard Agreements alleged to have been violated by the United States, which was insufficient in accordance with the Appellate Body’s decision in Korea — Dairy. The Panel observed that while the Appellate Body in Korea — Dairy found that there are occasions when a mere listing of articles, in and of itself, may fall short of the standard of DSU Article 6.2, it gave examples of such situations thus implying that the listing of articles may in fact suffice in other situations. According to the Panel, the situations where a mere listing of articles would be insufficient is one in which “the paragraphs and subparagraphs of the articles at issue involve not only one single obligation, but rather multiple obligations in a “complex multi-phased process [in which] every phase must meet with certain legal requirements and comply with the legal standards set out in the agreement”.”(496) In this particular dispute, the Panel found that the listing of the articles did, in light of the attendant circumstances, ensure sufficient clarity.(497)

313. In EC — Tube or Pipe Fittings, the European Communities requested the Panel to make a preliminary ruling that some of Brazil’s claims were not within its terms of reference. The Panel noted that among the said claims, were several provisions cited by Brazil in its first written submission that were not mentioned in its request for establishment. The Panel considered that Brazil’s claims under those provisions were not within its terms of reference. The Panel cautioned against the use of the expression “especially, but not exclusively” when identifying the claims in a request for establishment of a panel:

“We note that the Panel request refers generally to the Articles of the Anti-Dumping Agreement in question (i.e. Articles 6, 9 and
12) and contains the phrase ‘especially (but not exclusively)’ when enumerating selective provisions (not including the provisions concerned here) under these Articles. However, we do not view such a general reference as sufficiently clear to identify the specific provisions at issue. This is particularly so in view of the fact that Articles 6, 9 and
12 of the Anti-Dumping Agreement contain multiple and diverse obligations, which relate to different subject-matters than the obligations contained in the specific provisions that are cited in the Panel request.(7) The phrase ‘especially, but not exclusively’ may be convenient, but is inadequate to ‘identify the specific measures at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly’ as required by Article 6.2 of the DSU. Furthermore, even assuming arguendo that the obligations in these provisions may be ‘inter-linked’ with or ‘dependent’ upon a provision that is identified in the Panel request, we do not consider that this consideration is relevant here. The mere fact that a claim may be legally dependent upon another claim does not mean that it is subsumed within, or encompassed by, that claim. If a claim is not identified in the Panel request, the fact that it may be ‘inter-linked’ with an identified claim is not determinative.”(498)

314. As regards the other claims in EC — Tube or Pipe Fittings, the European Communities had requested the Panel to find that they were not within its terms of reference. The Panel considered that the European Communities had failed to demonstrate any prejudice to its interests by the way these “claims” appeared in the Panel request:

“We consider that it is not necessary for us to rule on whether these allegations constitute ‘claims’ or ‘arguments’. If they are arguments, there would be no need for them to be set out in the Panel request. Even assuming that all of the allegations identified above are ‘claims’ in respect of which the text of the Panel request may be somewhat deficient in describing the nature of the complaint, the European Communities has failed in any event to demonstrate to us any prejudice to its interests throughout the course of these Panel proceedings by the way these ‘claims’ appeared in the Panel request…”(499)”

315. In EC — Trademarks and Geographical Indications (Australia), the European Communities argued that a number of the provisions listed by Australia in its request for establishment did not provide a brief summary of the legal basis of the complaint in sufficient detail to present the problem clearly. The Panel disagreed, finding, in a preliminary ruling, that a reference to a common obligation in the provisions may meet the standard of Article 6.2 in certain circumstances:

“The Panel considers that the mere listing of provisions of the relevant covered agreements may not satisfy the standard of Article 6.2 of the DSU, for instance, where the listed provisions establish multiple obligations rather than one single, distinct obligation.(500) However, where the multiple obligations are closely related and interlinked, a reference to a common obligation in the specific listed provisions may be sufficient to meet the standard of Article 6.2 of the DSU under certain circumstances in a particular case.”(501),(502)

316. In EC — Approval and Marketing of Biotech Products, the Panel stressed that the sufficiency of a panel request is to be determined on the circumstances of each case and “there is no requirement to identify specific clauses or sub-clauses within an article, paragraph or sub-paragraph”:(503)

“We do not consider that, for the purposes of an Article 6.2 inquiry, the structure of the provisions contained in the WTO agreements constitutes some kind of ’safe haven’, such that it would always be sufficient to specify sub-paragraph numbers in cases where a provision has several sub-paragraphs, etc. In our view, whether a particular manner of citing provisions is sufficient will depend on the circumstances of each case, and in particular on the extent to which the particular citation sheds light on the nature of the obligation at issue. Having said this, we think that the fact that two or more distinct obligations are set out, e.g., in one and the same sub-paragraph may provide a strong indication that those obligations are very similar in nature. In such cases, specification of the relevant sub-paragraph number may shed sufficient light on the nature of the obligation at issue to
meet the minimum standard of precision required under Article 6.2.”(504)

317. In EC — Approval and Marketing of Biotech Products, with respect to the European Communities arguments that the complainants had listed provisions which were mutually exclusive or subject to other provisions, the Panel noted that nothing in Article 6.2 of the DSU prevents the listing of mutually exclusive provisions or those subject to other provisions:

“Neither the text of Article 6.2 nor relevant jurisprudence suggests that a complaining party needs to explain, in the panel request, the reasons for identifying particular treaty provisions. Such explanation is to be provided through arguments to be developed in the complaining party’s written submissions and oral statements.(505) Accordingly, we do not consider that the Complaining Parties’ panel requests are defective because they do not explain why certain provisions are listed even though they may be mutually exclusive or may apply subject to other provisions. Nor do we consider that the panel requests are defective because they do not make it clear whether all of the provisions listed are alleged to apply to the same aspect of a particular measure, or whether some provisions are alleged to apply to different aspects of the same measure. It is sufficient to recall in this regard that a panel request need not set out arguments ‘as to which specific aspects of the measures at issue relate to which specific provisions of [the] agreements [alleged to have been violated].”(506),(507)

318. In Korea — Commercial Vessels, Korea argued that the European Communities had failed to meet Article 6.2’s requirements by failing to choose between prohibited and actionable subsidies claims regarding the measures at issue.(508) The Panel decided, in a preliminary ruling, that complementary or alternative claims under multiple provisions is not only permitted but also required by Article 6.2. In this regard, it stated:

“[W]e can only conclude that if a complaining party wishes to pursue claims in respect of a given measure under multiple provisions, whether complementarily or alternatively, not only is it permitted by Article 6.2 of the DSU to refer to all of those provisions in its request for establishment, but it is required to do so. In this respect, we find that the European Communities’ request for establishment meets this requirement, as it identifies quite clearly which provisions are at issue… and it explicitly states the European Communities’ view that, pursuant to these provisions, the relevant measures are specific subsidies that are export contingent, and that cause serious prejudice to the interests of the European Communities. There is thus no doubt as to which provisions are cited by the European Communties in respect of which measures, and on what basis”.(509)

319. In Mexico — Anti-Dumping Measures on Rice, the Panel considered, in a preliminary ruling, that when examining the consistency of a request for establishment with Article 6.2 of the DSU, the request must be considered as a whole and the claims read in their context:

“While we consider that the US request for establishment could have been clearer in identifying precisely which of the paragraphs of Article VI of the GATT 1994 the United States claims to have been violated, we do not agree with Mexico that the request for establishment in this respect did not provide a brief summary of the legal basis of the claim sufficient to present the problem clearly. We consider that it is important when examining the consistency of part of the request for establishment with Article 6.2 of the DSU, not to examine parts of this request in isolation. Rather, in our view, the request must be considered as a whole, and the different claims in the request for establishment must be read in their context.(510) In our view, the accompanying narrative and the provisions of the AD Agreement also alleged to have been violated make it clear that the US claims in this respect concern the determination of injury caused by dumped imports”.(511)

Indication of which measures violate which provisions

320. The Panel in EC — Approval and Marketing of Biotech Products agreed that the respondent’s ability to defend itself is not prejudiced by the fact that the panel request merely states that each of the measures listed violates each of the provisions within a listing:

“[T]he three panel requests as worded indicate that each of the measures at issue in these requests is alleged to violate each of the provisions identified. We consider, therefore, that the claims that may be pursued are ‘sufficiently identified in the panel request[s]’(512) and that the European Communities knows what case it may have to answer and that it can begin to prepare its defence based on that knowledge.”(513),(514)

321. In Canada — Wheat Exports and Grain Imports, the Panel tackled the issue whether a particular panel request made it clear which measures were alleged to violate which provisions:

“We do not agree with Canada’s assertion that the panel request does not make it clear which laws, regulations or actions are inconsistent with which obligation. The panel request states that ‘the laws, regulations and actions of the Government of Canada and the CWB related to exports of wheat appear to be […]. inconsistent with
paragraph 1(b) of Article XVII of the GATT 1994 […]’. This wording suggests to us — and we consider that it should suggest to Canada and the third parties as well — that the United States may have wished to claim before us that each of the three categories of measures identified — laws, regulations and actions — is inconsistent with both obligations of
Article XVII:1(b). This way of presenting the Article XVII claim does not, in our view, have as a consequence that Canada does not know what case it has to answer and so cannot begin to prepare its defence, or that the third parties are uninformed as to the legal basis of the complaint and thus lack an opportunity effectively to respond to the United States’ complaint.”(515)

Relationship between claims raised in an anti-dumping investigation and claims raised in a panel request

322. In Thailand — H-Beams, the Appellate Body ruled on the relationships between claims raised in an underlying anti-dumping investigation and claims raised by a complaining party in a related dispute brought before the WTO:

“[I]t cannot be assumed that the range of issues raised in an anti-dumping investigation will be the same as the claims that a Member chooses to bring before the WTO in a dispute. Furthermore, although the defending party will be aware of the issues raised in an underlying investigation, other parties may not. Thus, the underlying investigation cannot normally, in and of itself, be determinative in assessing the sufficiency of the claims made in a request for the establishment of a panel. We, therefore, are of the view that, in this case, the Panel erred to the extent that it relied mainly on issues raised in the underlying antidumping investigation in assessing the sufficiency of Poland’s panel request under
Articles 2 and 5.”(516)

Distinction between claims and arguments

323. After agreeing with the Panel that the request for the establishment of the panel contained sufficient identification of the specific measures at issue to fulfil the requirements of Article 6.2 of the DSU, the Appellate Body in EC — Bananas III set out the difference between claims and arguments, and furthermore rejected the notion of “curing” a faulty panel request where claims had not been included in the panel request:

“In our view, there is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel’s terms of reference under Article 7 of the DSU, and the arguments supporting those claims, which are set out and progressively clarified in the first written submissions, the rebuttal submissions and the first and second panel meetings with the parties.

Article 6.2 of the DSU requires that the claims, but not the arguments,
must all be specified sufficiently in the request for the establishment of a panel in order to allow the defending party and any third parties to know the legal basis of the complaint. If a claim is not specified in the request for the establishment of a panel, then a faulty request cannot be subsequently ‘cured’ by a complaining party’s argumentation in its first written submission to the panel or in any other submission or statement made later in the panel proceeding.”(517)

324. In EC — Hormones, the European Communities argued on appeal that since the Panel was not entitled to make findings beyond what has been requested by the parties, it had erred by basing the main part of its reasoning on Article 5.5 of the SPS Agreement on a claim that the complainants had not made. The Appellate Body rejected the European Communities’ argument and emphasised the distinction between claims and arguments:

“Considering that in its request for the establishment of a panel in the proceeding initiated by the United States, as well as in the proceeding started by Canada, both complainants have included a claim that the European Communities ban is inconsistent with Article 5 of the SPS Agreement, we believe that the objection of the European Communities overlooks the distinction between legal claims made by the complainant and arguments used by the complainant to sustain its legal claims.… Panels are inhibited from addressing legal claims falling outside their terms of reference. However, nothing in the DSU limits the faculty of a panel freely to use arguments submitted by any of the parties — or to develop its own legal reasoning — to support its own findings and conclusions on the matter under its consideration. A panel might well be unable to carry out an objective assessment of the matter, as mandated by
Article 11 of the DSU, if in its reasoning it had to restrict itself solely to arguments presented by the parties to the dispute. Given that in this particular case both complainants claimed that the European Communities measures were inconsistent with Article 5.5 of the SPS Agreement, we conclude
that the Panel did not make any legal finding beyond those requested by the parties.”(518)

325. The Panel in Thailand — H-Beams discussed the sufficiency of a panel request, stressing the distinction between claims and arguments:

“Thailand argues that ‘a panel may only accept the mere listing of a particular article as sufficient if absolutely no prejudice was possible during the course of the proceedings.’ According to Thailand, ‘this would be the case only where (1) a panel found that the complainant had failed to present a prima facie case and thus the adequacy of the defence was irrelevant or (2) a panel did not reach the claims under the listed articles because it decided the case solely on claims properly described in the request.’(519) We are concerned here that Thailand is blurring the distinction between, on the one hand, the sufficiency of the panel request and, on the other, the issue of whether or not the complaining party establishes a prima facie case of violation of an obligation imposed by the covered agreements. We recall that ‘there is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel’s terms of reference under Article 7 of the DSU, and the
arguments supporting those claims, which are set out and progressively clarified in the first written submissions, the rebuttal submissions and the first and second panel meetings with the parties.’(520)Article 6.2 DSU does not relate directly to the sufficiency of the subsequent written and oral submissions of the parties in the course of the proceedings, which may develop the arguments in support of the claims set out in the panel request. Nor does it determine whether or not the complaining party will manage to establish a prima facie case of violation of an obligation under a covered agreement in the actual course of the panel proceedings …”(521)

326. In Chile — Price Band System, Chile had asked the Appellate Body to reverse the Panel’s finding on the inconsistency of Chile’s price band system with Article II:1(b) second sentence on the ground that Argentina had not actually made a claim under that second sentence. Argentina referred to
paragraph 156 of the Appellate Body Report in EC — Hormones in support of its argument that “even if none of the parties had advanced arguments regarding the second sentence of Article II:1(b) of the GATT 1994, the Panel would have had the right, indeed the duty, to develop its own legal reasoning to support the proper resolution of Argentina’s claim.” The Appellate Body considered that, in this case, the Panel “had neither a “right” nor a “duty” to develop its own legal reasoning to support a claim under the second sentence” and stressed that “the Panel was not entitled to make a claim for Argentina, or to develop its own legal reasoning on a provision that was not at issue”:

“In EC — Hormones, and in US — Certain EC Products, we affirmed the capacity of panels to develop their own legal reasoning in a context in which it was clear that the complaining party had made a claim on the matter before the panel. It was also clear, in both those cases, that the complainant had advanced arguments in support of the finding made by the panel — even though the arguments in support of the claim were not the same as the interpretation eventually adopted by the Panel. The situation in this appeal is altogether different. No claim was properly made by Argentina under the second sentence of Article II:1(b). No legal arguments were advanced by Argentina under the second sentence of Article II:1(b). Therefore, those rulings have no relevance to the situation here.

Contrary to what Argentina argues, given our finding that Argentina has not made a claim under the second sentence of Article II:1(b), the Panel in this case had neither a ‘right’ nor a ‘duty’ to develop its own legal reasoning to support a claim under the second sentence. The Panel was not entitled to make a claim for Argentina, or to develop its own legal reasoning on a provision that was not at issue.”(522)

327. In India — Patents (US), on the issue of claims and arguments, the Appellate Body stated:

“[T]here is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel’s terms of reference under Article 7 of the DSU, and the
arguments supporting those claims, which are set out and progressively clarified in the first written submissions, the rebuttal submissions, and the first and second panel meetings with the parties as a case proceeds.”(523)

328. In Korea — Dairy, Korea argued in its appeal that the Panel had erred by failing to consider Korea’s argument that parties to a dispute settlement procedure cannot introduce new claims at, or subsequent to, the rebuttal stage. The Appellate Body emphasized the difference between claims and arguments as follows:

“[W]e agree with Korea that a party to a dispute settlement proceeding may not introduce a new claim during or after the rebuttal stage. Indeed, any claim that is not asserted in the request for the establishment of a panel may not be submitted at any time after submission and acceptance of that request.(524) By ‘claim’ we mean a claim that the respondent party has violated, or nullified or impaired the benefits arising from, an identified provision of a particular agreement. Such a claim of violation must, as we have already noted, be distinguished from the arguments adduced by a complaining party to demonstrate that the responding party’s measure does indeed infringe upon the identified treaty provision.(525) Arguments supporting a claim are set out and progressively clarified in the first written submissions, the rebuttal submissions and the first and second panel meetings with the parties.(526) In European
Communities—Hormones, we emphasized the substantial latitude enjoyed by panels in treating the arguments presented by either of the parties and said:

‘… Panels are inhibited from addressing legal claims falling outside their terms of reference. However, nothing in the DSU limits the faculty of a panel freely to use arguments submitted by any of the parties — or to develop its own legal reasoning-to support its own findings and conclusions on the matter under its consideration.(527)’

Both ‘claims’ and ‘arguments’ are distinct from the ‘evidence’ which the complainant or respondent presents to support its assertions of fact and arguments.”(528)

329. In Canada — Autos, the Panel considered whether Japan’s claim that it could “[reserve] its right to elaborate during the course of the panel deliberations” had prejudiced Canada’s ability to defend itself. The Panel indicated that Canada had suffered no prejudice:

“First, the Panel does not consider that this is a situation where, as argued by Canada, the complaining party is permitted ‘to eke out its claims incrementally during the various stages of the case’. In making this argument, Canada refers to the Appellate Body decision in European Communities — Regime for the importation, Sale and Distribution of Bananas (EC — Bananas III). However, the situation here is unlike that in EC — Bananas III, where the Appellate Body stated that ‘Article 6.2 of the DSU requires that the claims, but not the arguments, must all be specified sufficiently in the request for the establishment of a panel in order to allow the defending party and any third parties to know the legal basis of the complaint’ (WT/DS27/AB/R, para. 143). In the case before us there is no Article 6.2 issue of specificity of the measures identified in the panel request. Japan in this dispute has not attempted to reserve a right to present a new claim at a later stage of the proceedings; rather, it appears that Japan has simply indicated that it may wish to further elaborate its arguments as to claims already set out in the panel request and in its initial arguments. As such, the Panel does not consider, at this stage, that Canada is likely to be prejudiced in its ability to defend itself in this action.(529)

Second, to the extent any issue of procedural fairness should arise, for example, as to the right of rebuttal by Canada should Japan wait until a later stage of these proceedings to develop its arguments as to its GATT Article III:4 and TRIMS Article 2.1 claims with respect to the ‘manufacturing requirement’ (production-to-sales ratio requirement), the Panel will ensure such procedural fairness by providing Canada with adequate opportunity to respond to any such further elaboration by Japan of its arguments under these claims.

Third, in addition to ensuring procedural fairness, it is of course necessary to set a cut-off date beyond which no new argumentation as to the claims in issue may be accepted, except upon a showing of good cause. In the instant case, the Panel considers that no new argumentation should be introduced beyond the second panel meeting with the parties, except in response to any questions posed by the Panel or otherwise upon a showing of good cause.”(530)

330. The Panel in EC — Bed Linen (Article 21.5 — India) noted the distinction drawn by the Appellate Body between claims and arguments and indicated that there existed “no obligation on a party to limit its arguments to only those treaty provisions about which claims have been identified in the request for establishment”(531)

331. In EC — Approval and Marketing of Biotech Products, the Panel, in a preliminary ruling, found that Article 6.2 did not require an explanation of the reasons for identifying certain treaty provisions and that panel requests did not have to set out arguments about which measures violated which obligations:(532)

“Neither the text of Article 6.2 nor relevant jurisprudence suggests that a complaining party needs to explain, in the panel request, the reasons for identifying particular treaty provisions. Such explanation is to be provided through arguments to be developed in the complaining party’s written submissions and oral statements.(533) Accordingly, we do not consider that the Complaining Parties’ panel requests are defective because they do not explain why certain provisions are listed even though they may be mutually exclusive or may apply subject to other provisions”.(534)

332. In EC — Selected Customs Matters, the Appellate Body asserted that
Article 6.2 requires the “claims” to be set out in a panel request in a way that is sufficient to present the problem clearly, not the “arguments”.

“[A]rticle 6.2 of the DSU requires that the claims- not the arguments- be set out in a panel request in a way that is sufficient to present the problem clearly.(535) Nothing in Article 6.2 prevents a complainant from making statements in the panel request that foreshadow its arguments in substantiating the claim. If the complainant chooses to do so, these arguments should not be interpreted to narrow the scope of the measures or the claims. Accordingly, we are of the opinion that the Panel erred when it found that the list of areas of customs administration in the third paragraph of the panel request limits the scope of the ‘specific measures at issue.’”(536),(537)

333. In China — Publications and Audiovisual Products, the Panel, in a statement not modified by the Appellate Body, noted that although a complainant must provide a “summary of the legal basis” of its complaint, this does not mean that the complainant is required, in its request for establishment, to set out the arguments in support of a particular claim”. The Panel considered “that there is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel’s terms of reference under Article 7 of the DSU, and the arguments supporting those claims.”(538)

334. In Australia — Apples, the Panel applied the Appellate Body’s distinction between claims and arguments set out in EC — Bananas III to rule that a comparison situation in the dispute relating to a Japanese product did not form part of New Zealand’s claim, but rather formed part of New Zealand’s arguments:

“The Panel does not view the comparison situation in this dispute, namely the one relating to Japanese nashi pears, as part of New Zealand’s claim. Rather, it belongs to New Zealand’s arguments. In EC — Bananas III, the Appellate Body established a clear distinction between claims and arguments. ‘[T]here is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel’s terms of reference under DSU Article 7, and the
arguments supporting those claims, which are set out and progressively clarified in the first written submissions, the rebuttal submissions and the first and second panel meetings with the parties.’”(539),(540)

Considering a claim against the design of a system “as a whole” challenge

335. In EC — Selected Customs Matters, the Appellate Body agreed that a Member is allowed to challenge within the WTO dispute settlement proceedings another Member’s system as a whole or overall and established that challenging the design or structure of a system is also permissible:

“By referring to the ‘design and structure’ of the European Communities’ system of customs administration, the United States sought to demonstrate how and why the instruments identified in the first paragraph of the panel request, as a whole, are administered in a manner leading to a lack of uniformity in their administration.(541) Thus, the United States’ contention on the ‘design and structure’ of the European Communities’ system of customs administration was made as an argument to substantiate its ‘as a whole’ challenge set out in the panel request. We therefore disagree with the Panel’s characterization of the United States’ contention on the ‘design and structure’ of the European Communities’ system of customs administration as a claim in itself. We noted earlier
that the ‘as a whole’ challenge of the United States is set out in the panel request consistently and according to the specificity requirements contained in Article 6.2 of the DSU. We therefore see no reason why the Panel was precluded from considering the United States’ arguments on the ‘design and structure’ of the European Communities’ system of customs administration.”(542)

Distinction between “as such” claims and “as applied” claims:

General

336. In US — Carbon Steel, the Appellate Body indicated that Members may challenge the consistency with the covered agreements of another Member’s laws, as such, as distinguished from any specific application of those laws:

“We note, first, that, in dispute settlement proceedings, Members may challenge the consistency with the covered agreements of another Member’s laws, as such, as distinguished from any specific application of those laws…

Thus, a responding Member’s law will be treated as WTO-consistent until proven otherwise. The party asserting that another party’s municipal law, as such, is inconsistent with relevant treaty obligations bears the burden of introducing evidence as to the scope and meaning of such law to substantiate that assertion.(543) Such evidence will typically be produced in the form of the text of the relevant legislation or legal instruments, which may be supported, as appropriate, by evidence of the consistent application of such laws, the pronouncements of domestic courts on the meaning of such laws, the opinions of legal experts and the writings of recognized scholars. The nature and extent of the evidence required to satisfy the burden of proof will vary from case to case.”(544)

337. In US — Oil Country Tubular Goods Sunset Reviews, the Appellate Body warned about the seriousness of “as such” challenges and urged complainants to “be especially diligent in setting out ‘as such’ claims in their panel requests as clearly as possible”:

“We also expect that measures subject to ‘as such’ challenges would normally have undergone, under municipal law, thorough scrutiny through various deliberative processes to ensure consistency with the Member’s international obligations, including those found in the covered agreements, and that the enactment of such a measure would implicitly reflect the conclusion of that Member that the measure is not inconsistent with those obligations. The presumption that WTO Members act in good faith in the implementation of their WTO commitments is particularly apt in the context of measures challenged ‘as such’. We would therefore urge complaining parties to be especially diligent in setting out ‘as such’ claims in their panel requests as clearly as possible. In particular, we would expect that ‘as such’ claims state unambiguously the specific measures of municipal law challenged by the complaining party and the legal basis for the allegation that those measures are not consistent with particular provisions of the covered agreements. Through such straightforward presentations of ‘as such’ claims, panel requests should leave respondent parties in little doubt that, notwithstanding their own considered views on the WTO-consistency of their measures, another Member intends to challenge those measures, as such, in WTO dispute settlement proceedings.”(545)

338. In EC — IT Products, the Panel noted that the DSU does not expressly distinguish between “as such” or “as applied” claims of violation, nor does Article 6.2 of the DSU or any other provision of the DSU set forth a particular burden of proof that applies to complainants who raise “as such” claims of violation. The Panel was faced with the question of whether it was “necessary to identify specific product models in order to establish an “as such” breach or is it sufficient to identify products that share a particular characteristic”.(546) In answering this question, the Panel observed that what is required to establish an “as such” breach will vary from case to case depending on the particular circumstances of the case, including the nature of the measures and obligations at issue.(547)

WTO doctrine on “as such” claims contrasted with traditional public international law

339. In US — Section 301 Trade Act, although it eventually held that a statute “which … reserves the right for the Member concerned to do something which it has promised not to do under Article 23.2(a)” was a violation of Article 23.2(a) read together with Article 23.1, the Panel made the following general statement on State responsibility:

“[U]nder traditional public international law, legislation under which an eventual violation could, or even would, subsequently take place, does not normally in and of itself engage State responsibility. If, say, a State undertakes not to expropriate property of foreign nationals without appropriate compensation, its State responsibility would normally be engaged only at the moment foreign property had actually been expropriated in a given instance.”(548)

(iv) “present the problem clearly”

General

340. In US — Oil Country Tubular Goods Sunset Review, the Appellate Body, further to referring to its previous reports on Thailand — H-Beams and Korea — Dairy, considered that a request for establishment “must plainly connect the challenged measure(s) with the provision(s) of the covered agreements claimed to have been infringed” in order to present the problem clearly:

“[I]n order for a panel request to ‘present the problem clearly’, it must plainly connect the challenged measure(s) with the provision(s) of the covered agreements claimed to have been infringed, so that the respondent party is aware of the basis for the alleged nullification or impairment of the complaining party’s benefits. Only by such connection between the measure(s) and the relevant provision(s) can a respondent ‘know what case it has to answer, and (…) begin preparing its defence’.”(549),(550)

Relevance of presenting the problem clearly

341. In Thailand — H-Beams, the Appellate Body explained the due process objectives behind the requirement for sufficient clarity in a panel request:

“Article 6.2 of the DSU calls for sufficient clarity with respect to the legal basis of the complaint, that is, with respect to the ‘claims’ that are being asserted by the complaining party. A defending party is entitled to know what case it has to answer, and what violations have been alleged so that it can begin preparing its defence. Likewise, those Members of the WTO who intend to participate as third parties in panel proceedings must be informed of the legal basis of the complaint. This requirement of due process is fundamental to ensuring a fair and orderly conduct of dispute settlement proceedings.”(551)

342. Also, in Thailand — H-Beams, the Appellate Body explained further how claims of prejudice should be assessed (commenting particularly on the timing of challenging the sufficiency of a Panel request):

“Thailand argues that it was prejudiced by the lack of clarity of Poland’s panel request. The fundamental issue in assessing claims of prejudice is whether a defending party was made aware of the claims presented by the complaining party, sufficient to allow it to defend itself. In assessing Thailand’s claims of prejudice, we consider it relevant that, although Thailand asked the Panel for a preliminary ruling on the sufficiency of Poland’s panel request with respect to Articles 5 and 6 of the Anti-Dumping Agreement at the time of filing of its first written submission, it did not do so at that time with respect to Poland’s claims under
Articles 2 and 3 of that
Agreement. We must, therefore, conclude that Thailand did not feel at that time that it required additional clarity with respect to these claims, particularly as we note that Poland had further clarified its claims in its first written submission. This is a strong indication to us that Thailand did not suffer any prejudice on account of any lack of clarity in the panel request.”(552)

343. In Chile — Price Band System, the Appellate Body ruled that “[t]he requirements of due process and orderly procedure dictate that claims must be made explicitly in WTO dispute settlement”:

“Argentina appears to suggest that a claim may be made implicitly, and need not be made explicitly. We do not agree. The requirements of due process and orderly procedure dictate that claims must be made explicitly in WTO dispute settlement. Only in this way will the panel, other parties, and third parties understand that a specific claim has been made, be aware of its dimensions, and have an adequate opportunity to address and respond to it. WTO Members must not be left to wonder what specific claims have been made against them in dispute settlement…”(553)

344. In US — Oil Country Tubular Goods Sunset Reviews, the United States had made a request for a number of preliminary rulings regarding both the clarity of the request for establishment and the scope of the terms of reference of the Panel. The Panel, after declining all requests for preliminary rulings, clarified that it had undertaken a textual analysis of the Panel request and that, therefore, it did not need to enter into the issue of whether the United States had been prejudiced in its right to defend itself due to the alleged inconsistencies in Argentina’s panel request:

“[W]e note that as our analysis with respect to the totality of the United States’ request for preliminary rulings was based on a textual analysis of Argentina’s panel request, we did not need to inquire into the issue of whether the United States had been prejudiced in its right to defend itself in the present proceedings due to the alleged inconsistencies in the panel request. We nevertheless note that the United States has not shown to the Panel that it had been prejudiced in its right to defend itself in these proceedings due to these alleged inconsistencies in Argentina’s panel request. In several instances, the United States argued that it did not know what case it had to answer because of the lack of precision with respect to certain parts of Argentina’s panel request.(554) However, we consider that without supporting arguments, this simple allegation can not be taken to establish prejudice.”(555),(556)

Clarity of claims in written submissions

345. In EC — Tube or Pipe Fittings, the European Communities had requested the Panel to refuse to consider certain of Brazil’s claims on the grounds that these claims were defective as they were too vaguely defined in Brazil’s first written submission. In the view of the European Communities, admission of these claims would constitute an infringement of the European Communities’ rights of defence and a departure from the good faith standard in Article 3.10 of the DSU and from the due process requirement that underlies the DSU. The Panel, in a preliminary ruling, rejected the European Communities’ request on the grounds that the opportunity would still exist for Brazil to provide further supporting evidence and argumentation in its subsequent submissions with a view to clarifying those allegations in the course of the Panel proceedings:

“To the extent the European Communities is arguing that the first submission is determinative for the clarity of the claims for the purpose of the entire proceeding — in the sense that if a claim is not clearly stated there, no further opportunity exists for clarification over any of the remaining portion of the proceedings — we cannot accept this argument. In our view, it is in the nature of the Panel process that the claims made by a party may be progressively clarified and refined throughout the proceeding.(557) This may occur through the submission of supporting evidence and argumentation by the parties, commencing with their first written submission, and followed by a round of rebuttal submissions, supplemented by oral statements and answers to questions. It is, of course, clear that this process of progressive clarification would not allow a party to add additional claims (which were not included in the request for establishment of the Panel) during the course of the proceedings. The fundamental due process rights of the parties are thereby preserved.

…

We find support for our ruling in the statement by the Appellate Body in its report on US — FSC
that the ‘procedural rules of WTO dispute settlement are designed to promote, not the development of litigation techniques, but simply the fair, prompt and effective resolution of trade disputes’.(558)”(559)

(f) Preliminary rulings under Article 6.2

(i) Regulation of a request for a preliminary ruling in standard working procedures

“Note: This sub-section provides information on preliminary rulings under Article 6.2 of the DSU. It should be noted that disputing parties have requested preliminary rulings in respect of a wide range of other
issues, including but not limited to the adequacy of consultations, admissibility of claims with respect to new or expired measures, issues related to panel composition, alleged conflicts of interest, enhanced third party rights, admissibility of certain evidence,
BCI procedures and other confidentiality issues, participation of private counsel, the panel’s timetable, amicus curiae briefs, open hearings, and consultations with scientific experts. Such rulings may be appealed with the final panel report along with any other legal issues subject to appeal.”

346. In EC — Bananas III, the Appellate Body considered that the compliance of the Panel request with Article 6.2 could be decided early by a preliminary ruling if panels had detailed, standard working procedures allowing it:(560)

347. In Colombia — Ports of Entry, the Panel referred to the Appellate Body’s statement in EC — Bananas 777 with regard to preliminary rulings and noted that “[w]hile the
DSU does not expressly envision preliminary rulings by panels, it has become an occurrence in the past few years. The Appellate Body has commented that panel working procedures should allow for the possibility of requests for preliminary rulings.(561)(562)

(ii) Absence of a requirement to rule on a preliminary basis

348. In Canada — Aircraft, Canada asked the Panel to issue a preliminary ruling on its jurisdiction before the deadline for the parties’ first written submission. The Panel denied the request on the grounds that there is no requirement nor established practice in that regard:

“Canada asked the Panel to issue the requested ruling on the Panel’s jurisdiction prior to the deadline for the parties’ first written submissions. In our view, there is no requirement in the DSU for panels to rule on preliminary issues prior to the parties’ first written submissions. Nor is there any established practice to this effect, for there are numerous panel reports where rulings on preliminary issues have been reserved until the final report.(563) Furthermore, there may be cases where the panel wishes to seek further clarification from the parties before providing a preliminary ruling. Indeed, we considered it necessary to request such clarification in the present case. In our view, the possibility for obtaining such clarification would be lost — or at least significantly undermined — if a panel were required to rule on preliminary issues before the deadline for the parties’ first written submissions. For these reasons, we rejected Canada’s request for a preliminary ruling on this issue prior to the deadline for the parties’ first submissions.”(564)

349. In India — Autos, India made a “conditional” preliminary ruling request. The Panel denied the request. Noting the panel’s statement in Canada — Aircraft, the Panel in India — Autos found also that it was appropriate to seek further clarifications on the nature of the matter before it.(565)

(iii) Issuance and circulation of preliminary rulings under Article 6.2

350. In some cases, panels have circulated their preliminary rulings, as WTO documents, to the DSB.(566)

351. In most cases to date, panels have issued preliminary rulings to the parties (and sometimes third parties) and reproduced the rulings in their final reports.(567)

C. Relationship with other Articles

1. Article 7.1

352. In EC — Selected Customs Matters, the Appellate Body, in considering the purpose of a panel request, resorted to the provisions of Article 17.1 inasmuch as they set out the Panel’s terms of reference on the basis of the panel request. On a plain reading of Article 17.1, the Appellate Body linked its provisions with the requirements under Article 6.2 of the DSU:

“[A] panel’s terms of reference are governed by the request for the establishment of a panel. In other words, the panel request identifies the measures and the claims that a panel will have the authority to examine and on which it will have the authority to make findings.”(568)

2. Article 19.1

353. In EC — Selected Customs Matters, the Appellate Body recalled its findings in US — Upland Cotton, and stressed that Article 19.1 does not place restrictions on the identification of measures at issue in a panel request:

“In US — Upland Cotton, the Appellate Body emphasized that the nature of a recommendation a panel may make under Article 19.1 of the DSU with respect to a measure ‘is not … dispositive of the preliminary question of whether a panel can address claims in respect of that measure’.(569) In that case, the Appellate Body had to address the issue of whether an expired measure can be a ‘measure at issue’ within the meaning of Article 6.2 of the DSU. The Appellate Body rejected the United States’ argument that, because an expired measure is not susceptible to a recommendation under Article 19.1 of the DSU, it cannot be a ‘measure at issue’ under Article 6.2. For the Appellate Body, the question of whether a panel can address claims in respect of an expired measure is to be distinguished from the question of whether that measure is susceptible to a recommendation under Article 19.1,(570) Although the issue addressed by the Appellate Body in US — Upland Cotton is not identical to that raised by the United States’ appeal in this case, the Appellate Body’s reasoning in US — Upland Cotton supports our position that Article 19.1 of the DSU does not place restrictions on the type of measure that can be identified in a panel request under Article 6.2 of the DSU.”(571)

3. Article 21.5

354. The Appellate Body in US — FSC (Article 21.5-EC I), stated that the requirements of Article 6.2 need to be adapted to a panel request under Article 21.5, as they apply to an original panel request. The Appellate Body stated that it “has … not been called to determine the precise scope of the phrase ‘these dispute settlement procedures’ in Article 21.5 and how it relates to Article 6.2 of the DSU.”(572) The Appellate Body was of the view that the phrase “does encompass Article 6.2 of the DSU, and that Article 6.2 is generally applicable to panel requests under Article 21.5.”(573) The Appellate Body went on to say that “given that Article 21.5 deals with compliance proceedings, Article 6.2 needs to be interpreted in the light of Article 21.5.”(574)

355. In US — FSC (Article 21.5-EC II), the Appellate Body discussed the relationship between Articles 6.2 and Article 21.5:

“The Appellate Body has, to date, not been called upon to determine the precise scope of the phrase ‘these dispute settlement procedures’ in Article 21.5 and how it relates to Article 6.2 of the DSU.(575) We do not consider it necessary, for purposes of resolving the present dispute, to determine the precise scope of this phrase. However, we are of the view that the phrase ‘these dispute settlement procedures’ does encompass Article 6.2 of the DSU, and that Article 6.2 is generally applicable to panel requests under Article 21.5. At the same time, given that Article 21.5 deals with compliance proceedings, Article 6.2 needs to be interpreted in the light of Article 21.5. In other words, the requirements of Article 6.2, as they apply to an original panel request, need to be adapted to a panel request under Article 21.5.”(576)

D. Relationship with other WTO Agreements

1. Anti-Dumping Agreement

(a) Article 17

(i) The term “matter” under paragraphs 4 and 5 of Article 17

356. In Guatemala — Cement I, the Appellate Body held that “[Article 1.2 of the DSU] states … that … special or additional rules and procedures ‘shall prevail’ over the provisions of the DSU ‘[t]o the extent that there is a difference between’ the two sets of provisions”. In this case, the Appellate Body considered whether there is inconsistency between Article 6.2 of the DSU and Article 17.5 of the Anti-Dumping Agreement. The Appellate Body stated:

268. (footnote original) We have difficulty understanding why the Panel considered it useful to engage in an abstract analysis of “what kind of precise language would have been appropriate for New Zealand to use” to identify, in its panel request, a measure other than the measures that New Zealand did identify. (Panel Report, para. 7.1475)
Back to text

269. (footnote original) We also note the Panel’s recognition at paragraph 11 of its preliminary ruling that New Zealand’s panel request did not prejudice “Australia’s ability to defend itself in the course of the Panel’s proceedings”.
Back to text

277. (footnote original) As stated by the Appellate Body in a somewhat different context in European Communities — Regime for the Importation, Sale and Distribution of Bananas, adopted 25 September 1997, WT/DS27/AB/R, para. 142:
“We recognize that a panel request will usually be approved automatically at the DSB meeting following the meeting at which the request first appears on the DSB’s agenda. As a panel request is normally not subjected to detailed scrutiny by the DSB, it is incumbent upon a panel to examine the request for the establishment of the panel carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU.”
Back to text

294. (footnote original) Having concluded that the European Communities has not identified the expedited review procedure as a specific measure at issue in its request for establishment, we need not, and do not, consider whether the European Communities has provided “a brief summary of the legal basis of the complaint sufficient to present the problem clearly” in that request for establishment (paras. 8.5-8.6, supra). Back to text

324. (footnote original) In China — Publications and Audiovisual Products, the complainant (the United States) had specified in its panel request a particular list of relevant products (i.e. books, newspapers and periodicals). The panel examined whether the use by the United States of such a limited list of publications in its panel request had been sufficient to put the respondent (China) on notice that it was making a claim with respect to a certain product (i.e. electronic publications). The panel found that, given that the United States “expressly limited the scope of its claim to ‘books, newspaper, and periodicals’ and did not refer to the broader category of ‘publications’”, China “could reasonably conclude, in good faith, that the United States was not including the treatment of electronic publications in its claim”. Panel Report, China — Publications and Audiovisual Products, paras. 7.145 — 7.147. In EC — IT Products, the panel found that the complainants (the United States, Japan and Chinese Taipei) had, inter alia, defined the multifunctional digital machines (the “MFMs”) products in footnote 15 of their joint panel request. According to the panel, as a result, the complainants had informed the European Union that their complaints were limited to the products defined in the footnote. The panel thus found that the claim of inconsistency with Article II of the GATT 1994 with reference to products other than the MFMs illustrated in footnote 15 of the joint panel request was outside the terms of reference of the panel. Panel Report, EC — IT Products, paras. 7.1204-7.1205.
Back to text

327. (footnote original) Recently, the Appellate Body has reiterated that: “a party’s submissions during panel proceedings cannot cure a defect in a panel request. We consider this principle paramount in the assessment of a panel’s jurisdiction. Although subsequent events in panel proceedings, including submissions by a party, may be of some assistance in confirming the meaning of the words used in the panel request, those events cannot have the effect of curing the failings of a deficient panel request. In every dispute, the panel’s terms of reference must be objectively determined on the basis of the panel request as it existed at the time of filing.” Appellate Body Report, EC and certain member States — Large Civil Aircraft, para. 642 (citing Appellate Body Report, EC — Bananas III, para. 143; Appellate Body Report, US — Carbon Steel, para. 127).
Back to text

349. (footnote original) Both specific determinations made by a Member’s executive agencies and regulations issued by its executive branch can constitute acts attributable to that Member. See, for example, the Panel Report in US — DRAMS, where the measures referred to the panel included a USDOC determination in an administrative review as well as a regulatory provision issued by USDOC.
Back to text

357. (footnote original) The two definitions of measure relevant to our consideration in the Concise Oxford Dictionary (Ninth Edition 1995) are “legislative enactment” and “suitable action to achieve some end”.
Back to text

363. (footnote original) As we understand it, Article XI: 1 does not incorporate an obligation to exercise “due diligence” in the introduction and maintenance of governmental measures beyond the need to ensure the conformity with Article XI: 1 of those measures taken alone.
Back to text

378. (footnote original) However, we recall that, in US — Cotton Yarn, the Appellate Body stated (when reviewing a textile safeguards determination) that a Member cannot be expected to examine “evidence that did not exist and that, therefore, could not possibly have been taken into account when the Member made its determination. … Consequently, a panel must not consider evidence which did not exist at that point in time” (Appellate Body Report, US — Cotton Yarn, paras. 77 and 78 (original emphasis; footnote omitted)) We also note the Appellate Body’s statement in EC — Sardines that “[t]he interim review stage is not an appropriate time to introduce new evidence.” (Appellate Body Report, EC — Sardines, para. 301).
Back to text

381. (footnote original)Appellate Body Report, EC — Chicken Cuts, para. 156. The Appellate Body explained that: These measures should also have been the subject of consultations prior to the establishment of the panel, although the Appellate Body has held that there is no need for a “precise and exact identity” between the measures addressed in consultations and the measures identified in the panel request. (Ibid., footnote 315 to para. 156 (referring to Appellate Body Report, Brazil — Aircraft, para. 132) (original emphasis)).
Back to text

386. (footnote original) The Appellate Body in Chile — Price Band System cited to a passage from the Panel Report on Argentina — Footwear (EC) which concluded that modifications made to the measure at issue during the panel proceedings did:
“… not constitute entirely new safeguard measures in the sense that they were based on a different safeguard investigation, but are instead modifications of the legal form of the original definitive measure, which remains in force in substance and which is the subject of the complaint.”
Back to text

389. (footnote original) It is foreseeable that a request for establishment naming a different measure than the request for consultations might be challenged as raising a matter as to which consultations were not held.
Back to text

390. (footnote original)DSU, Article 3.10. To be clear, we are not suggesting that the European Union engaged in any such manoeuvring in this dispute. There is no reason for us to think that the European Union’s decision to repeal and replace Council Regulation No. 384/96 bore any relationship whatsoever to this dispute, and China has not suggested otherwise. Our concern is for the potential consequences of our decision.
Back to text

407. In US — Hot-Rolled Steel, Japan had also challenged the “general” practice of the United States’ investigating authorities regarding total facts available. The Panel did not rule on whether a general practice could be challenged separately from the statutory measure on which it is based because it concluded that Japan’s claim in this regard was outside its terms of reference. Indeed, the Panel found that there was no mention of such a claim in Japan’s request for the establishment of a panel. Panel Report, US — Hot-Rolled Steel, para. 7.22.
Back to text

419. (footnote original) We note that this distinction has played a role in a number of GATT/WTO dispute settlement proceedings. See, notably, Panel Report, Japan — Trade in Semi-Conductors (“Japan — Semi-Conductors “), adopted 4 May 1988, BISD 35S/116, paras. 110-117.
Back to text

442. (footnote original) We note, in this regard, the introductory statement of the SPB:
This policy bulletin proposes guidance regarding the conduct of sunset reviews. As described below, the proposed policies are intended to complement the applicable statutory and regulatory provisions by providing guidance on methodological or analytical issues not explicitly addressed by the statute and regulations.
(SPB, p. 18871) This statement was also referenced by the Appellate Body in US — Corrosion-Resistant Sunset Review, at paragraph 74.
Back to text

446. The Appellate Body noted that the Panel had not focused in its report on the Standard Zeroing Procedures as a measure per se, but instead considered that the procedures as “‘relevant evidence to ascertain the existence of a methodology.’” (See Appellate Body Report, US — Zeroing (EC), para. 176).
Back to text

467. (footnote original) See, e. g., United States — Superfund: The scheme in question involved, inter alia, a discriminatory penalty tax that would be imposed if required information was not submitted by the importer. The Panel first found that such a penalty tax, if imposed, would violate Article III:2, then went on to find that the Superfund Act did not in fact require imposition of the tax, as the law foresaw the possibility for the United States to adopt regulations that would eliminate the need to impose it (United States — Taxes on Petroleum and Certain Imported Substances (“Superfund”), Report of the Panel, adopted 17 June 1987, BISD 34S/136, para. 5.2.9); Thailand — Cigarettes: After finding that the discriminatory tax rates provided for under the law would violate GATT rules, the Panel went on to find that the Thai authorities both had sufficient regulatory discretion to implement the law consistent with the GATT, and had actually exercised that discretion in that way(Thailand — Restrictions on Importation of and Internal Taxes on Cigarettes, Report of the Panel, adopted 7 November 1990, BISD 37S/200, para. 84); United States — Tobacco: The US statute mandated that the US Department of Agriculture assess “comparable” inspection fees for imported and domestic tobacco, and the Panel first considered the meaning of the word “comparable” in light of the relevant GATT requirement that such fees be “commensurate” with the cost of services rendered to imported tobacco. The Panel then concluded that the United States had the discretion to interpret “comparable” as “commensurate” (and in practice had done so), i. e., that the legislation did not require a violation (United States — Measures Affecting the Importation, Internal Sale, and Use of Tobacco, Report of the Panel, adopted 4 October 1994, BISD 41S/131, para. 123).
Back to text

469. The Panel justified the different approach as follows: “We note that the Panel in United States — Measures Treating Exports Restraints as Subsidies first considered whether certain action was in conformity with WTO requirements and only then addressed whether the measure at issue mandated such action.… In the circumstances of the case at hand, where there is a major factual dispute regarding whether section 129(c)(1) requires and/or precludes certain action, we think that a panel is of most assistance to the DSB if it examines the factual issues first. Moreover, we do not see how addressing first whether certain actions identified by Canada would contravene particular WTO provisions would facilitate our assessment of whether section 129(c)(1) mandates the United States to take certain action or not to take certain action. Finally, we have taken into account the fact that, in the present case, our ultimate conclusions with respect to Canada’s claims would not differ depending on the order of analysis we decided to follow”. Panel Report, US — Section 129(c)(1) URAA, footnote 72.
Back to text

471. (footnote original) Imagine, for example, legislation providing that all imports, including those from WTO Members, would be subjected to a customs inspection and that the administration would enjoy the right, at its discretion, to impose on all such goods tariffs in excess of those allowed under the schedule of tariff concessions of the Member concerned. Would the fact that under such legislation the national administration would not be mandated to impose tariffs in excess of the WTO obligation, in and of itself exonerate the legislation in question? Would such a conclusion not depend on a careful examination of the obligations contained in specific WTO provisions, say, Article II of GATT and specific schedule of concessions?
Back to text

472. (footnote original) See paras. 4.173 ff. and 7.51 of this Report.
Back to text

474. (footnote original) We note that in a recent case, a panel found that even discretionary legislation may violate certain WTO obligations. See Panel Report, United States — Section 301, supra, footnote 23, paras. 7.53-7.54.
Back to text

475. (footnote original) We note that, in the EC Panel Report, the Panel reached the same results as in the Japan Panel Report without making any finding that the notion of mandatory/discretionary legislation “is no longer relevant”.
Back to text

478. (footnote original) We observe that the scope of each element in the phrase “laws, regulations and administrative procedures” must be determined for purposes of WTO law and not simply by reference to the label given to various instruments under the domestic law of each WTO Member. This determination must be based on the content and substance of the instrument, and not merely on its form or nomenclature. Otherwise, the obligations set forth in Article 18.4 would vary from Member to Member depending on each Member’s domestic law and practice.
Back to text

482. (footnote original) In footnote 95 to para. 7.114, the Panel quoted the following statement from para. 7.88 of the Panel Report in US — Steel Plate: “[t]he Appellate Body has recognized the distinction, but has not specifically ruled that it is determinative in consideration of whether a statute is inconsistent with relevant WTO obligations.”
Back to text

483. (footnote original) In our Report in US — 1916 Act, we examined the challenged legislation and found that the alleged “discretionary” elements of that legislation were not of a type that, even under the mandatory/discretionary distinction, would have led to the measure being classified as “discretionary” and therefore consistent with the Anti-Dumping Agreement. In other words, we assumed that the distinction could be applied because it did not, in any event, affect the outcome of our analysis. We specifically indicated that it was not necessary, in that appeal, for us to answer “the question of the continuing relevance of the distinction between mandatory and discretionary legislation for claims brought under the Anti-Dumping Agreement”. (Appellate Body Report, US — 1916 Act, para. 99) We also expressly declined to answer this question in footnote 334 to paragraph 159 of our Report in US — Countervailing Measures on Certain EC Products. Furthermore, the appeal in US — Section 211 Appropriations Act presented a unique set of circumstances. In that case, in
defending the measure challenged by the European Communities, the United States unsuccessfully argued that discretionary regulations, issued under a separate law, cured the discriminatory aspects of the measure at issue.
Back to text

495. Appellate Body Report, Korea — Dairy, paras. 123 and 127. In Argentina — Ceramic Tiles, Argentina raised as a defence the concept of harmless error and argued that the complainant, the European Communities, had failed to demonstrate that the exporters concerned were prejudiced by the failure to determine an individual dumping margin. Argentina defined the concept of harmless error as “an error that does not cause injury or affect the rights of one of the parties” and contended that this concept has been accepted in WTO law through the Report of the Appellate Body in the Korea — Dairy (see para. 94 of this Chapter). The Panel noted “however, that the Appellate Body Report in the Korea — Dairy Safeguards case, to which Argentina refers in support of its argument, dealt with the question of whether the request for establishment met the requirements of Article 6.2 of the DSU. The issue before the Appellate Body was whether Article 6.2 of the DSU was complied with or not. The Appellate Body, in deciding that question, concluded that one element to be considered was whether the defending Member was prejudiced in its ability to defend itself by a lack of clarity or specificity in the request for establishment. The Appellate Body did not address the question whether, once it had been established that a provision of the Agreement is violated, it needs in addition to be demonstrated that this violation had prejudiced the rights of the complaining party. Thus, we do not agree that this Appellate Body decision supports Argentina’s argument that the concept of harmless error has been accepted in WTO law.” Panel Report, Argentina — Ceramic Tiles, paras. 6.102-6.103.
Back to text

513. The Panel also indicated in footnote 93 of its preliminary ruling, that the third-parties due-process rights were not prejudiced. “We note, in addition, that just like we do not consider that the summaries of the legal basis of the complaints provided in the Complaining Parties’ panel requests result in the European Communities not knowing what case it has to answer and hence being unable to begin preparing its defence, so also we do not consider that those summaries result in the third parties being uninformed as to the legal basis of the Complaining Parties’ complaints and thus unable effectively to respond to these complaints. We recall in this regard that none of the third parties has offered any comments on the European Communities’ objections to the Complaining Parties’ panel requests.”
Back to text

521. Panel Report, Thailand — H-Beams, para. 7.43. This passage was cited with approval by the Panel in US — Gambling, Annex B, para. 39 which rejected the US request to conclude that Antigua and Barbuda had failed to make its prima facie case in a preliminary ruling, since “Antigua and Barbuda ha[d] two sets of written submissions and two panel hearings to convince the Panel that it ha[d] established a prima facie case”.
Back to text

529. (footnote original) See the Appellate Body Report on EC — Bananas III, supra note 49, para. 141, where the Appellate Body states that, in its view, “there is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panels terms of reference under Article 7 of the DSU, and the arguments supporting those claims, which are set out and progressively clarified in the first written submissions, the rebuttal submissions and the first and second panel meetings with the parties”.
Back to text

541. (footnote original) We note that, in response to questioning by the Panel, the United States stated that “the support for the [United States’] claim under Article X:3(a) includes evidence of both the design and structure of the [European Communities’] system of customs administration and specific instances of non-uniform administration.” (United States’ response to Question 173 posed by the Panel, Panel Report, p. B-29 (emphasis original)).
Back to text

557. (footnote original) We recall the statement by the Appellate Body that “there is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel’s terms of reference under para. 141.
Back to text